World stock markets rallied on Thursday, with the Dow and S&P 500 setting new highs, while the U.S. dollar slipped as investors viewed this week's fresh U.S. and Chinese tariffs on imports as less harsh than initially feared.

Still, investors remained cautious about the next steps in the U.S.-China trade dispute, driving long-dated U.S. Treasury yields lower. But the equity market's early take on the latest moves was that they were mostly benign for the U.S. economy.

The greenback fell amid a drop in safe-haven demand for the currency and a resurgence in global risk appetite on relief the new round of tariffs was less harsh than feared.

The Dow industrials became the last key U.S. stock index to regain record territory, while the benchmark S&P 500 set a fresh record high. The Dow and tech-heavy Nasdaq closed almost 1 percent higher, as many European indexes did too.

The MSCI index tracking shares in 47 countries rose 0.87 percent to a three-week high, supported by gains in Europe and Asia.
The pan-European FTSEurofirst 300 index of leading regional shares closed up 0.74 percent, as investors focused on bullish macroeconomic and corporate news. The blue-chip EURO STOXX 50 closed up 1.03 percent.

U.S. consumer confidence and small business optimism remain near post-crisis highs, while there is still further positive impact from earnings and U.S. tax reform and two more quarters of corporate repatriation of profits held abroad, Mahajan said.

Tech stocks led all three major U.S. indexes higher in a broad-based rally on Wall Street.

The Dow Jones Industrial Average rose 251.22 points, or 0.95 percent, to 26,656.98. The S&P 500 gained 22.8 points, or 0.78 percent, to 2,930.75 and the Nasdaq Composite added 78.19 points, or 0.98 percent, to 8,028.23.

The dollar index, tracking it against six major currencies, fell 0.7 percent, with the euro up 0.92 percent to $1.1779. The Japanese yen weakened 0.12 percent versus the greenback at 112.41 per dollar.

The dollar had benefited from growing trade-related tensions in recent months, as investors bet it would gain at the expense of riskier currencies.
Benchmark 10-year U.S. Treasury notes last rose 4/32 in price to yield 3.0682 percent.

Oil prices eased, slowing an upward surge that had pushed the market toward four-year highs, after U.S. President Donald Trump called on the Organization of Petroleum Exporting Countries to "get prices down now." Brent crude oil settled down 70 cents at $78.70 a barrel. U.S. light crude oil slid 32 cents to settle at $70.80.

U.S. gold futures for December delivery settled up $3 at $1,211.30 per ounce.