Wall Street rebounds as investors cast off trade fears
Wall Street regained its cheer on Monday, casting off fears of trade Armageddon as major US stock indices forged higher.
The turnabout among American investors brought a bullish close to what had started out as a dour day on world markets.
President Donald Trump issued fresh early morning Twitter blitz on trade and stocks in Milan fell after rise of the far right in Italy's elections.
German stocks, by contrast, rose amid relief sparked by an agreement for another grand coalition led by Chancellor Angela Merkel.
In New York, investors concluded Trump's threats to impose sweeping steel and aluminum tariffs with no exemptions for key allies like Canada and Mexico, could be a bargaining tactic to get his way in talks to renegotiate the North American Free Trade Agreement.
"Most investors do not believe the president will go through with such a strict and onerous plan," Sam Stovall of CFRA told AFP.
The Dow Jones Industrial Average broke a four-day winning streak to add 1.3 percent while the S&P 500 and Nasdaq each gained one percent or more. Fears of a trade war on Thursday and Friday had sent markets tumbling.
Mixed political outcome in Europe
Meanwhile in Italy, the anti-establishment Five Star Movement and the far-right euro-sceptic League party were the big winners of the Italian election, which laid bare widespread anger over immigration and frustration with mainstream politics.
Neither of the anti-establishment parties is "an attractive option for markets or the euro", said Rebecca O'Keeffe of Interactive Investor.
Germany, on the other hand, struck a blow for normalcy, as coalition talks finally concluded and Merkel pledged to work with the "Social Democrats" for the good of Germany.
Foreign exchange investors decided that encouraging news from Germany outweighed the uncertainty over Italy, and the euro rose against the dollar, which also was weakened by Trump's trade threats.
Earlier on Monday, Asian markets fell again as the fallout from Trump's proposed steel and aluminum tariffs fanned fears of a global trade conflict.
Shares in Tokyo and Hong Kong sank while Shanghai posted a modest 0.1 percent gain.
Key figures around 2200 GMT
New York - Dow: UP 1.4 percent at 24,874.76 (close)
New York - S&P 500: UP 1.1 percent at 2,720.94 (close)
New York - Nasdaq: UP one percent at 7,330.70 (close)
Milan - FTSE MIB: DOWN 0.4 percent at 21,819.91 points (close)
London - FTSE 100: UP 0.7 percent at 7,115.98 (close)
Frankfurt - DAX 30: UP 1.5 percent at 12,090.87 (close)
Paris - CAC 40: UP 0.6 percent at 5,167.23 (close)
EURO STOXX 50: UP 0.9 percent at 3,355.32 (close)
Tokyo - Nikkei 225: DOWN 0.7 percent at 21,042.09 (close)
Hong Kong - Hang Seng: DOWN 2.3 percent at 29,886.39 (close)
Shanghai - Composite: UP 0.1 percent at 3,256.93 (close)
Euro/dollar: UP at $1.2335 from $1.2300
Pound/dollar: UP at $1.3844 from $1.3792
Dollar/yen: UP at 106.18 yen from 105.73 yen
Oil - Brent North Sea: UP $1.17 at $65.54 per barrel
Oil - West Texas Intermediate: UP $1.32 at $62.57
