NEW YORK: World stock markets and US benchmark bond yields gained on Thursday following strong economic data as investors assessed the latest developments in global trade relations.
A spike in US-China tensions over import tariffs has convulsed markets recently as investors seek to parse statements from government leaders to gauge the direction of talks.
News that President Donald Trump is expected to delay auto tariffs appeared to improve the trade tone on Wednesday, but later in the day the Trump administration hit Chinese telecoms giant Huawei with severe sanctions.
"The market is really having a hard time pricing in this trade war," said Mark Hackett, chief of investment research at Nationwide.
"There was a belief earlier in the week that it was going to be catastrophic and we have gained back all of that decline.
In my opinion, it is probably a little too optimistic to declare victory."
On Wall Street, the Dow Jones Industrial Average rose 273.04 points, or 1.06pc, to 25,921.06, the S&P 500 gained 37.33 points, or 1.31pc, to 2,888.29 and the Nasdaq Composite added 107.94 points, or 1.38pc, to 7,930.08.
Shares of Cisco Systems and Walmart both gave boosts to the S&P 500 and the Dow after their respective earnings reports. Cisco shares rose 6.4pc and Walmart rose 3.3pc.
The Philadelphia semiconductor index fell 0.9pc following the Huawei news.
The pan-European STOXX 600 index rose 1.14pc.
MSCI's gauge of stocks across the globe gained 0.82pc.
US homebuilding increased more than expected in April and activity in the prior month was stronger than initially thought. In a separate report, the number of Americans filing applications for unemployment benefits fell more than expected last week.
US Treasury yields rose following the strong economic data.
Benchmark 10-year notes last fell 9/32 in price to yield 2.4104pc, from 2.379pc late on Wednesday.
The US dollar rose against a basket of currencies as investors focused on trade war tensions, while the euro was hurt by concerns about next week's European parliamentary elections.
The dollar index rose 0.25pc, with the euro down 0.23pc to $1.1174.
"The risk is that we get more populist comments, such as from the Italian Deputy PM," said Credit Agricole FX strategist Manuel Olivieri.
"Italy remains one of the factors keeping euro downside risks high."
Oil prices rose for a third day running as fears of supply disruption amid heightened tensions in the Middle East overshadowed swelling US crude inventories.
US crude rose 2.14pc to $63.35 per barrel and Brent was last at $73.13, up 1.89pc on the day.
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