Global stocks rise, but vaccine euphoria is giving way to COVID-19 caution as US cities and states lockdown again

• Global shares edge higher, but the momentum of this week's rally began to fade, as COVID-19 infection rates forced new restrictions across the US.
• US stock futures rose around 0.8%, pointing to a stronger start to trade later in the day, while oil surrendered some of this week's gains.
• Basic resources, energy, and brick-and-mortar retail stocks were among the biggest laggards in Europe, while technology stocks recovered some of this week's losses.

Global equities rose on Friday, but gains were limited as the euphoria over a possible COVID-19 vaccine gave way to concerns about the record rise in cases across the US and Europe, which prompted new lockdowns and restrictions.

Futures on the S&P 500, the Dow Jones and the Nasdaq 100 were last trading between 0.75 and 0.8% higher, indicating the benchmark indices may recover some of Thursday's losses at the start of trade later in the day.

Most major European indices traded only modestly higher on Friday, while cases of COVID-19 continued to spiral across a region where many large economies are in lockdown. Infections across the EU, the European Economic Area and the UK reached 9.88 million on Thursday, while the death toll neared 255,000, according to data from the European Centre for Disease Prevention and Control.

The Stoxx 600 was last up 0.1%, while London's FTSE 100 lost 0.2%, Frankfurt's DAX rose 0.3% and Italy's FTSE MIB rose 0.5%

Pfizer, the second-largest drugmaker by revenue after Johnson & Johnson, said on Monday its trial of a COVID-19 vaccine had yielded promising results. Smaller rival Moderna said on Wednesday it was nearing the point at which it too would be able to release the results of its competing trial.

Pfizer's announcement on Monday triggered the biggest rotation into "real economy" stocks since the financial crisis, according to JPMorgan.

Read More: How to trade the 'McConnell Cap' as Republican Kentucky senator has become Stimulus-in-Chief, according to a $400 mln wealth manager

World equities hit record highs, with the S&P 500 and the Dow Jones topping the peaks of early September. The oil price is on course for its biggest rally in two months this week, while perceived safe havens have stumbled.

The US 10-year Treasury has come under heavy fire this week. The yield, which moves inversely to the price, is trading around 0.89%, close to its highest since mid-March. Meanwhile, gold is down by around 4% this week, trading at $1,875 an ounce. On Monday, gold fell by 5%, the most in one day since early 2013.

However, world leaders, central bankers and healthcare experts have all urged caution in declaring victory over the virus. From the European Central Bank, to the International Energy Agency, to Dr Anthony Fauci, the leading expert on infectious diseases in the United States, the message to the markets has been that of waiting and seeing if Pfizer's vaccine is as effective as it promises. It has also warned that there is unlikely to be any immediate boost to economic activity until well into next year.

ING chief strategist, Chris Turner, said in a note this week: "None of this unfortunately changes the near-term fact that the global economy faces a challenging winter. Renewed lockdowns across the eurozone are likely to shave roughly 2% off GDP in the fourth quarter, according to our latest forecasts, while the risk of further restrictions in the US will put a considerable brake on activity."

This caution played out very clearly across the equity sectors on Friday. In Europe, retail, basic resources and oil and gas stocks were among the biggest laggards, while technology stocks, which took a beating earlier in the week, were among the few sectors still in positive territory.

In the US, several cities and states, including New York, Chicago, Detroit and California, have imposed restrictions on public gatherings and movement, as hospitalization rates soar and threaten, once again, to overwhelm hospitals.

On the commodity markets, the energy sector was in the red, as crude oil, diesel and gasoline futures retreated, paring some of this week's huge rally. Brent crude futures were last down 1% at $43.21 a barrel, while WTI futures lost 1.2% to trade around $40.59 a barrel. London gasoil futures, a proxy for diesel that are highly correlated to the global economy, were down 2.7%, while US gasoline futures lost 1.5%.

Read More: Goldman Sachs says to load up on these 22 energy stocks set to soar as the market recovers — and details 10 to ditch