China conciliatory tone pushes markets higher

Risk appetite returned to markets on Tuesday after China’s President Xi Jinping struck a conciliatory tone on trade during a major address. Stocks in Asia and Europe rallied and U.S. equity index futures jumped, while some safe-haven assets retreated.

The Stoxx Europe 600 Index followed shares from Sydney to Hong Kong higher alongside oil and metals. Xi said Cold War and zero-sum mentalities were “out of place,” and backed free trade and dialogue to resolve disputes. Treasuries extended declines with the yen, while gold pared a drop but stayed lower. European government bonds were broadly stable. Growth Through Cuts With Xi’s comments seemingly pointing to a less-combative approach from China and U.S. President Donald Trump also striking a more conciliatory tone, traders are weighing whether fears of a trade war were overblown. That’s reinvigorating faith in the synchronized global-growth story ahead of earnings season, even after a Federal Reserve official cautioned that the spat between the world’s two-biggest economies won’t be resolved soon.

The Stoxx Europe 600 Index advanced 0.6 percent as of 6:39 a.m. New York time, the highest in more than four weeks. Futures on the S&P 500 Index increased 1.1 percent. The MSCI All-Country World Index climbed 0.3 percent. The U.K.’s FTSE 100 Index gained 0.5 percent to the highest in six weeks. Germany’s DAX Index jumped 1.1 percent to the highest in more than four weeks. The MSCI Emerging Market Index increased 0.5 percent to the highest in a week. The MSCI Asia Pacific Index advanced 0.7 percent to the highest in two weeks on the largest gain in two weeks.

West Texas Intermediate crude gained 1.3 percent to $64.25 a barrel, the highest in more than a week. Copper increased 0.7 percent to $3.10 a pound, the highest in more than three weeks. Gold decreased 0.1 percent to $1,335.19 an ounce.