European markets got an additional push from a survey showing that the eurozone economy expanded in May at the highest rate in three months. Britain's FTSE 100 was up 0.5% at 7,249 in midday trading, while the DAX in Germany advanced more than 0.5% to 12,028. The CAC 40 in France rose 0.6%, to 5,300.
Wall Street was on track to extend gains, with the future contract for the Dow Jones Industrial Average up 0.6% to 25,497. The S&P 500 future also picked up 0.6%, to 2,820. Asian markets gave back some early gains after the World Bank said it was downgrading its forecast for the global economy in light of those trade disputes and other strains.
The World Bank said it expects the world economy to expand at a 2.6% pace this year, the slowest growth since 2016 and below its 2.9% forecast made in January. "We are not pushing the panic button yet," said Ayhan Kose, a World Bank economist. But he said the anti-poverty agency foresees a potentially deeper slowdown if trade hostilities persist.
That cast a slight damper on market sentiment, though most Asian benchmarks still closed higher. Japan's Nikkei 225 index jumped 1.8% to 20,776.10 while the Hang Seng in Hong Kong advanced 0.5% to 26,895.44. The Shanghai Composite index ended almost flat at 2,861.42. South Korea's Kospi added 0.1% to 2,069.11.
Australia's S&P ASX 200 climbed 0.4% to 6,358.50 after the central bank's decision Tuesday to trim its benchmark interest rate by a quarter of a percentage point, the first such cut in nearly three years.
The biggest lift for markets came from Fed Chairman Jerome Powell's comment Tuesday that the central bank was "closely monitoring" trade developments and would "act as appropriate" to sustain the U.S. economic expansion.
Hopes for resolving the U.S.-Mexico trade dispute also helped. Mexican Foreign Minister Marcelo Ebrard said Mexico can likely reach a deal with the U.S. at a meeting Wednesday. That would stave off President Donald Trump's threat to place 5% tariffs on Mexican goods beginning June 10 as part of a broader immigration dispute. Republican senators expressed opposition to the proposed tariffs.
Investors have been dumping stocks in recent weeks, worried that the expanding conflicts between the U.S. and some of its biggest trading partners could slow U.S. economic growth and stymie corporate profits.
Robust market gains earlier this year were partly fueled by the Fed's adoption of a more patient approach to its rates policy after steadily raising rates for two years. Investors have been hoping it will go further and cut interest rates to give the economy another push.
ENERGY: Benchmark U.S. crude shed 40 cents to $53.08 per barrel in electronic trading on the New York Mercantile Exchange. It gained 0.4% to settle at $53.48 a barrel on Tuesday. Brent crude oil, the international standard, gave up 8 cents to $61.89 per barrel. It closed 1.1% higher at $61.97 per barrel overnight.
CURRENCIES: The dollar rose to 108.30 Japanese yen from 108.15 yen on Tuesday. The euro strengthened to $1.1266 from $1.1251.
Matt Ott in Madrid contributed to this report.