Wall Street rises, dollar rebounds amid tariff talks, economic data

US stocks advanced and the dollar rebounded on Tuesday as investors weighed progress in ongoing US tariff talks and lowered economic expectations ahead of Friday's crucial US employment report.

All three major US stock indexes ended the session with gains, with chips putting the tech-heavy Nasdaq out front following White House assurances that US President Donald Trump will likely meet Chinese President Xi Jinping this week to address trade disputes between the world's two largest economies.

Gold backed down from a nearly four-week high as the greenback strengthened.

"It's hard to know what's really driving things today," said Chuck Carlson, CEO of Horizon Investment Services in Hammond, Indiana.

"There seems to be a little bit more comfort that the economy is not going into recession, and there might be a bit of front-running here in the sense we have a jobs report that's going to be coming out and investors want to get on the right side of that before it's released."

While the Trump administration pressed US trading partners to provide their best offers by Wednesday, the protracted negotiations and moving deadlines have prompted economists to dial back economic expectations due to fallout from Trump's trade war.

The Organization for Economic Cooperation and Development (OECD) said the global economy is on course for a more drastic slowdown than it had expected only a few months ago. It cited Trump's trade war, and warned of even weaker growth as protectionism increases, fueling inflation and disrupting supply chains. 

The United Nations' International Labor Organization (ILO) downgraded its global employment forecast, citing worsened economic conditions from trade tensions.

"Maybe that's helping US markets," Carlson added, noting that the weaker global economic growth projections could be encouraging investors to move money back into US

The US Labor Department reported that the number of unfilled US jobs unexpectedly rose in April, while new orders for factory-made goods posted a steeper drop than analysts had anticipated.

Investors are now focused on the May employment report due on Friday. Economists polled by Reuters expect the US economy added 130,000 jobs last month, with the unemployment rate standing pat at 4.2 per cent.

The Dow Jones Industrial Average rose 214.16 points, or 0.51 per cent, to 42,519.64, the S&P 500 rose 34.43 points, or 0.58 per cent, to 5,970.37 and the Nasdaq Composite rose 156.34 points, or 0.81 per cent, to 19,398.96.

European stocks ended nominally higher as investors weighed trade anxieties against a report that euro zone inflation has eased below the European Central Bank's target, paving the way for further policy easing.

MSCI's gauge of stocks across the globe rose 2.64 points, or 0.30 per cent, to 885.52.

The pan-European STOXX 600 index rose 0.09 per cent, while Europe's broad FTSEurofirst 300 index rose 3.80 points, or 0.17 per cent

Emerging market stocks rose 3.67 points, or 0.32 per cent, to 1,157.44. MSCI's broadest index of Asia-Pacific shares outside Japan closed higher by 0.37 per cent, to 609.73, while Japan's Nikkei fell 23.86 points, or 0.06 per cent, to 37,446.81.

The dollar bounced back from a six-week low, even as concerns persisted over potential economic damage in the wake of Trump's trade war.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.71 per cent to 99.28, with the euro down 0.62 per cent at $1.137.

Against the Japanese yen, the dollar strengthened 0.93 per cent to 144.02.

Longer-dated US Treasury yields dipped as investors awaited new developments in trade talks, but were off initial lows in the wake of economic data.

The yield on benchmark US 10-year notes fell 1 basis point to 4.452 per cent, from 4.462 per cent late on Monday.

The 30-year bond yield fell 1.8 basis points to 4.9769 per cent from 4.995 per cent late on Monday.

The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 0.8 basis points to 3.953 per cent, from 3.945 per cent late on Monday.

Crude prices extended gains, supported by geopolitical concerns as the war in Ukraine intensified and Iran appeared poised to reject a US nuclear deal proposal.

US crude rose 1.42 per cent to settle at $63.41 per barrel, while Brent settled at $65.63 per barrel, up 1.55 per cent on the day.

Gold prices retreated from a nearly four-week high amid profit-taking and in opposition to the strengthening dollar.

Spot gold fell 0.78 per cent to $3,352.87 an ounce. US gold futures fell 0.59 per cent to $3,350.60 an ounce.