Global stock markets rally amid signs of easing trade tensions

Global equity markets gained on Tuesday amid signs of easing trade tensions, while longer-dated US Treasury yields were set for their biggest one-day drop in more than a month, mirroring moves in the Japanese bond market.

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US President Donald Trump paused his threatened tariffs until July 9 on US imports of European goods following a weekend call with European Commission President Ursula von der Leyen.

Data showed on Tuesday that US consumer confidence snapped five straight months of decline and improved in May amid a truce in the trade war between Washington and Beijing.

All three Wall Street indexes advanced, with the Nasdaq up almost 28 following Monday's Memorial Day holiday. The S&P 500's II subsectors all gained, led by consumer discretionary and technology stocks.

The Dow Jones Industrial Average rose 1.27% to 42,131.69, the S&P 500 rose 1.59% to 5,895.13 and the Nasdaq Composite rose 1.95% to 19,102.95.

European shares rose 0.48%, supported by technology and industrials stocks. UK shares climbed 0.83% following a holiday at the start of the week. MSCI's gauge of stocks across the globe rose 0.98% to 878.87.

"It was good news over the weekend, at least for the market, with the 30-day extra time frame for the EU trade tariff negotiation deadline. I guess the market was happy about that," said Wasif Latif, chief investment officer at Sarmaya Partners in New Jersey.

"Then the Bank of Japan said it was not going to issue as many bonds and so the yield story looked a little bit better."