By David Hodari 

U.S. stocks opened higher Wednesday, continuing a recent stretch of volatility as signs of easing trade tensions boosted the outlook for global economic growth.

The Dow Jones Industrial Average climbed 277 points, or 1.1%, to 24646, and the S&P 500 added 1.1%. The advance came after both indexes fell for the fourth time in five sessions Tuesday. Both gauges were down more than 9% from their all-time highs and off 1.4% for the year entering Wednesday.

The tech-heavy Nasdaq Composite rose 1.3%, on track for a third consecutive advance.

Fears about slowing global growth as tariffs mount and interest rates rise have buffeted stocks and commodities recently. Some investors are anxious that weaker trade activity will exacerbate an already-expected slowdown in the global economy if the U.S. and China aren't able to resolve a monthslong tariff spat.

Incremental updates on the trade negotiations have swung risky assets in both directions recently. China plans to replace an industrial policy with a new program promising greater access for foreign companies in a move to resolve trade tensions with the U.S., The Wall Street Journal reported early Wednesday.

The news came after Beijing's top trade negotiator told U.S. officials a day earlier that China was planning to reduce auto tariffs and boost purchases of soybeans and other crops.

The warming in U.S.-China trade relations has prompted cautious optimism among some investors, analysts said.

"A resolution on global trade is one of the most important issues for markets going into 2019," said Viktor Hjort, global head of credit strategy at BNP Paribas. "The positive angle is that U.S. and Chinese negotiators appear to be making an effort, but I think at this point, any absence of bad news is good news."

President Trump said in an interview with Reuters Tuesday that he would intervene in the Justice Department's case against Huawei Chief Financial Officer Meng Wanzhou if it would help smooth a trade deal with China. Ms. Meng was granted bail by a Canadian judge Tuesday. The tech executive's arrest last week stoked fears of heightened tensions between the world's two largest economies.

Uncertainty around trade will remain elevated, though, with technological and intellectual property disputes between Washington and Beijing unlikely to die down despite more conciliatory rhetoric, said Ann-Katrin Petersen, investment strategist at Allianz Global Investors.

Worries about trade policy have intensified in recent weeks as fresh doubts about the path for interest rates in the U.S. have also cropped up. While many analysts expect the Federal Reserve to raise rates again next week, the central bank has hinted that it might slow its pace of tightening next year if U.S. economic growth slows more than expected.

Data Wednesday showed U.S. consumer prices were flat in November, a sign a recent drop in oil prices is holding down inflation. The report is the latest suggesting inflationary pressures are waning, which could give central bankers more latitude to move slowly with rate increases next year, analysts said.

Analysts have said the economic impact of oil's recent slide is murky because the U.S. is producing record amounts of crude, meaning the sharp drop could affect business investment and confidence even as gasoline prices fall. Oil prices climbed Wednesday ahead of weekly inventory figures, boosting energy stocks.

The yield on the benchmark 10-year U.S. Treasury note rose to 2.899%, according to Tradeweb, from 2.881%. Bond yields climb as prices fall. The WSJ Dollar Index, which tracks the dollar against a basket of 16 other currencies, fell 0.3%.

Elsewhere, European stocks climbed for the second straight session as analysts largely shrugged off a leadership challenge against U.K. Prime Minister Theresa May. The Stoxx Europe 600 climbed 1.5%, and the British pound trimmed some of its recent drop.

Lawmakers in the U.K.'s ruling Conservative Party initiated a no-confidence vote against Mrs. May. On Monday, she postponed a parliamentary vote on her Brexit bill, which prompted a new volley of criticism over her handling of the country's exit from the European Union.

Wednesday's vote is the latest in a series of developments that have prompted investors from outside the U.K. to limit their exposure to Brexit uncertainty in recent months, said Emmanuel Cau, head of European equity strategy at Barclays.

"Global investors have left the U.K. equities and FX markets and not many people have the ability to trade on what's going to happen," said Mr. Cau. "In this particular situation, nobody's been able to make forecasts so they've stopped trying."

Rises in European stocks echoed gains in Asia, where the Nikkei climbed 2.2% and Hong Kong's Hang Seng Index rose 1.6%. Benchmarks in Taiwan, South Korea and Singapore all increased more than 1%.

-- Amrith Ramkumar contributed to this article.

Write to David Hodari at David.Hodari@dowjones.com

(END) Dow Jones Newswires

December 12, 2018 10:05 ET (15:05 GMT)

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