Stocks and the yuan advanced after President Joe Biden said China tariffs imposed by the Trump administration were under consideration. The dollar and Treasuries retreated.
Energy and basic resources shares led gains in Europe's Stoxx 600 Index and US equity futures jumped more than 1pc after the S&P 500 dropped for a seventh straight week.
Stocks also rose in Asia and emerging markets.
Traders interpreted Biden's comments that he'll discuss the US tariffs on Chinese imports with Treasury Secretary Janet Yellen when he returns from his Asia trip as a signal there could be a reversal of some Trump-imposed measures.
He also said the US military would intervene to defend Taiwan in any attack from China and announced that a dozen Indo-Pacific countries will join the US in a sweeping economic initiative designed to counter China's influence in the region.
Treasuries dropped as traders debate the Federal Reserve's tightening path amid mounting worries about an economic slowdown.
Base metals extended their rebound from a five-month low as the demand outlook was bolstered by the weaker dollar and China's loan-rate cut.
Bitcoin recovered from some weekend weakness to trade around $30,000.
Equities have been volatile as investors assess the impact of China's Covid policies on growth and the outlook for the world's largest economies.
Beijing reported a record number of Covid cases, reviving concerns about a lockdown. China's stringent adherence to Covid Zero has stifled economic growth and prompted banks last week to cut a key interest rate for long-term loans by a record amount.
"It seems that while there is an initial attempt to ride on some dip-buying sentiments from Wall Street, an increase in virus cases in Beijing is putting a cap on risk sentiments in the region, with China's zero-Covid policy set to remain for the foreseeable future," said Jun Rong Yeap, a market strategist at IG Asia.
Investors are grappling with concerns about an economic slowdown and prospects for more monetary tightening.
The war in Ukraine is fanning commodity prices, and supply chains remain disrupted by China's adherence to its Covid zero policy.
"As macro-economic concerns stemming from aggressive monetary tightening, the Russia-Ukraine conflict and China's stringent Covid lockdowns persist, we anticipate great volatility in the market," Louise Dudley, portfolio manager global equities at Federated Hermes Ltd., said in a note.
Minutes of the most recent Fed rate-setting meeting will give markets insight this week into the US central bank's tightening path.
St. Louis Fed President James Bullard said the central bank should front-load an aggressive series of rate hikes to push rates to 3.5pc at year's end, which if successful would push down inflation and could lead to easing in 2023 or 2024.