The feud between the world's two largest economies has been injecting volatility into the market as both sides escalate and then pull back. "The U.S.-China tug of war will continue, but there is growing sense that U.S.-China sentiment may be shifting to a state of trade war neutrality," said Stephen Innes, Asia-Pacific market strategist at AxiTrader.
France's CAC 40 added 0.5% to 5,620, while Germany's DAX gained nearly 0.8% to 12,364. Britain's FTSE 100 was up 1% at 7,336. U.S. shares were set to drift higher with Dow futures rising 0.1% and S&P 500 futures up marginally.
Japan's benchmark Nikkei 225 rose nearly 1.0% to finish at 21,597.76. Australia's S&P/ASX 200 rose 0.4% to 6,638.00. South Korea's Kospi added 0.8% to 2,049.20. Hong Kong's Hang Seng gained 1.7% to 27,130.04, while the Shanghai Composite slid 0.4% to 3,008.81.
On Wall Street, investors continued to flock to smaller-company stocks they see as being better shielded from the fallout of the costly trade war between the U.S. and China than large multinationals. Meanwhile, investors continue to watch the steady flow of economic data for a clearer picture of the global economy's health. Recent reports on the U.S. have been mixed, including a report Tuesday that showed both a slip in job openings as well as a slight increase in hiring in July.
The Labor Department will report the latest consumer price index figures on Thursday and the Commerce Department will report August retail sales data on Friday. Economists continue to expect the Federal Reserve to cut interest rates at its meeting next week to help maintain U.S. economic growth.
The European Central Bank, meanwhile, is expected to offer some kind of stimulus after its policy meeting on Thursday, though what shape the new measures will take remains unclear. ENERGY: Benchmark crude oil rose 57 cents to $57.97. It fell 45 cents to $57.40 a barrel on Tuesday. Brent crude oil, the international standard, gained 48 cents to $62.86 a barrel.
CURRENCIES: The dollar rose to 107.67 Japanese yen from 107.39 yen on Tuesday. The euro edged down to $1.1010 from $1.1035.