Trade negotiators are due to meet in September for new negotiations, though there has been no sign of progress in recent days since an escalation by both sides earlier this month. Investors worry the spiraling tariff war over trade and technology could tip the global economy into recession.
London's FTSE 100 was up 1.1% to 7,191 and Frankfurt's DAX advanced by the same rate to 11,829. France's CAC 40 gained 1.4% to 5,443. Italy's FTSE-MIB did best, gaining almost 2% to 21,392. European stocks appeared further boosted by a deal to create a new more centrist government in Italy that leaves out the rightwing populist Lega party. The Lega's leaders have clashed with European allies and the EU repeatedly over issues like debt and migration, and their sidelining could ease some concern of a destabilization by populist politicians.
In Asia, the Shanghai Composite Index slipped 0.1% to 2,890.92 and Tokyo's Nikkei 225 declined 0.1% to 20,460.93. Hong Kong's Hang Seng was up 0.3% at 25,703.50. South Korea's Kospi shed 0.4% to 1,933.41 and Sydney's S&P-ASX 200 was up 0.1% at 6,507.40. New Zealand declined while Taiwan and Singapore gained.
Despite the rise in Wall Street futures, investors' confidence appears fragile as they juggle multiple threats to growth. Beyond the trade war, the risk is growing of a no-deal Brexit - and the trouble it could create for companies in Europe.
In a sign of caution in the U.S., traders looking for safety snapped up U.S. government bonds. Bond buying drove long-term bonds further below short-term ones on Wednesday. That inversion of the U.S. yield curve is a rare phenomenon that has correctly predicted previous recessions.
The yield of the 10-year Treasury fell below that of the two-year Treasury for a second day. The 10-year yield slid to 1.47%, down from 1.49% late Tuesday. The two-year dropped to 1.50% from 1.52%. When the U.S. yield curve inverted earlier this month for the first time since 2007, it led to a sell-off. This week, investors' reaction has been more muted.
U.S. economic growth slowed to an annual rate of 2.1% in the April-June quarter from 3.1% in the first quarter. While an inverted yield curve has preceded every U.S. recession, it is not a signal that one is imminent. It has taken 14 to 34 months for past recessions to begin following a yield curve inversion.
ENERGY: Benchmark U.S. crude gained 36 cents to $56.14 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained 85 cents on Wednesday to close at $55.78. Brent crude, used to price international oils, rose 2 cents to $59.95 per barrel in London. It rose 90 cents the previous session to $59.93.
CURRENCY: The dollar rose to 106.26 yen from Wednesday's 106.11 yen. The euro declined to $1.1071 from $1.1078.