Gains were capped, however, by expectations that the US-China trade row will escalate again after Beijing said it planned to impose anti-dumping sanctions worth billions of dollars on Washington.
“Stocks have ticked up although traders remain nervous about the state of global trading relations,” said market analyst David Madden at CMC Markets UK.
“China have been making life tricky for the US, and now the ball is in President Trump’s court. Dealers know full well what sort of reaction we could see from Mr Trump, and some are in wait and see mode,” he added.
Analyst Craig Erlam at Oanda said the lull is likely to be just temporary.
“With China involving the WTO in the dispute and the US preparing more tariffs — and threatening an eventual tariff on all imports — it doesn’t appear this threat is going away any time soon and is something we should just get used to,” Erlam said.
European markets finished higher.
London’s FTSE 100 rose 0.6% to close at 7,313.36 points; Frankfurt’s DAX 30 was up 0.5% at 12,032.30, while Paris’ CAC 40 gained 0.9% at 5,332.13.
The EURO STOXX 50 surged 0.5% at 3,328.16.
Wall Street was mixed in late morning trading, with the Nasdaq being pulled lower by tech stocks, while the Dow rose 0.6 %.
Earlier in Asia, an ongoing stock market sell-off showed no sign of letting up, partly fuelled by trade fears, and partly by a brewing emerging markets crisis.
The new turn in the US-China spat meanwhile adds to a sense of pessimism across trading floors in recent weeks as the world’s top two economic powers stand on the cusp of an all-out trade war that observers fear could batter the global economy.
China on Tuesday said it would ask the World Trade Organization next week for permission to impose more than $7bn in sanctions annually on the United States over anti-dumping practices.
The WTO will discuss the issue on September 21.
Oil prices, especially the US contract for WTI, rose as category 4 Hurricane Florence moved towards the eastern US, threatening massive destruction.
“Oil prices are well supported as dealers try to get a handle on Hurricane Florence potential impact” on crude supplies, noted Oanda analyst Dean Popplewell.
In foreign exchange markets, the British pound dropped after reports that Brexit supporters in the Conservative Party were planning to remove Prime Minister Theresa May.
The weakness in the currency in turn helped London stocks in their recovery from morning lows, as big exporters stand to gain from a softer pound.
EU Commission President Jean-Claude Juncker meanwhile undermined a key part of Britain’s plan to quit the bloc, warning that London cannot expect to remain in parts of the single market.
The pound later recovered to stand higher against the dollar.
