NEW YORK -- Equities around the world rose on Monday while US Treasury prices fell as risk assets were in demand after the United States shelved plans to impose tariffs on Mexico, easing worries the global economy would face another trade war.
The US dollar gained against a basket of major currencies while the Mexican peso was on track for its biggest one-day percentage gain against the dollar since July 2018.
The US-Mexico trade and migration deal also boosted emerging market stocks and sent US government bond yields higher as investors favored riskier assets.
While US equities gained, they ended below the session's highs as investors turned their focus to the US-China trade war and slowing economic data.
"You've a bit of a euphoria after positive tweets from the president about the Mexico relationship and the delaying of tariffs," said Phil Blancato, CEO of Ladenburg Thalmann Asset Management in New York. Referring to weak May jobs data released on Friday, he added: "You can't deny the data. The data from last week is going to percolate to the surface."
After five days of gains, Wall Street's indexes may trade sideways without another catalyst, said Blancato, adding that progress in US-China trade talks and Federal Reserve cuts in US interest rates may be slower than investors expect.
"The only one that could really propel the market higher would be a trade deal with China or if the Fed comes in and surprises everybody by cutting interest rates in June," he said.
Trump said on Monday that he was ready to impose another round of tariffs on Chinese imports if he does not reach a trade deal with China's president at a Group of 20 summit later this month.
The Dow Jones Industrial Average rose 78.74 points, or 0.3 percent, to 26,062.68, the S&P 500 gained 13.39 points, or 0.47 percent, to 2,886.73 and the Nasdaq Composite added 81.07 points, or 1.05 percent, to 7,823.17.
The pan-European STOXX 600 index rose 0.21 percent and MSCI's gauge of stocks across the globe gained 0.53 percent. Emerging market stocks rose 1.45 percent.
MEXICAN PESO GAINS
US government bond yields rose as risk appetite was lifted by the US-Mexico trade and migration deal signed on Friday.
Benchmark 10-year Treasury notes last fell 18/32 in price to yield 2.1466 percent, from 2.084 percent late on Friday.
Oil prices fell more than 1 percent on Monday as US-China trade tensions continued to threaten demand for crude and as major producers Saudi Arabia and Russia had yet to agree on extending an output-cutting deal.
Brent crude futures settled down 1.6 percent, or $1.00, at $62.29 a barrel. US West Texas Intermediate (WTI) crude lost 73 cents, or 1.4 percent, to end at $53.26 a barrel.
In currency trading, the dollar index rose 0.21 percent, with the euro down 0.17 percent to $1.1312.
The euro pulled back after sources said European Central Bank policymakers were open to cutting interest rates should economic growth weaken.
The US dollar was down 2 percent against the Mexican peso, which was at its highest level since May 31.
Spot gold dropped 0.9 percent to $1,327.83 an ounce, after closing at its highest level since February on Friday.