The Fed on Wednesday suggested rate cuts might start as soon as next month, saying it was ready to take action in the face of growing economic risks.
In Europe, the broader Euro STOXX 600 edged up 0.3%, with Germany’s DAX rising 0.6%, while France’s CAC 40 climbed 0.2%.
“The trade war is driving markets at the moment,” said Rory McPherson, head of investment strategy at Psigma Investment Management in London.
Oil neared the key $70 per barrel mark — a multi-month high — on supply concerns.
World stocks consolidated gains on Wednesday after hitting a 4-1/2 month high last week as investors shrugged off reports of fresh China stimulus.
U.S. President Donald Trump said negotiations with China were going well and suggested he was open to extending the deadline to complete them beyond March 1.
MSCI’s All-Country World Index rose 0.3 percent after Japan’s Nikkei closed up 1.8 percent at its highest level of the year and MSCI’s index of Asian equities rose almost one percent.
European shares followed Asia’s lead to rise across the board with the trade-sensitive German index jumping 0.8 percent and the pan-European STOXX 600 up 0.5 percent.
The pan-European STOXX 600 slipped 0.1 percent in early trading with Paris’s CAC and Frankfurt’s DAX both falling around 0.2-0.3 percent.
The Fed said it would pause its 3-year interest rate rise campaign while assessing the weakening of the economy.
May’s government faces a no confidence vote on Wednesday after the shattering rejection left Britain’s exit from the European Union in disarray.
The effects of the global bond selloff that took U.S. 10-year bond yields to seven-year highs this week were exacerbated by economic growth concerns stemming from trade conflicts and $80-per-barrel oil.
MSCI’s index of world stocks .MIWD00000PUS rose 0.3 percent to its highest since May 14, helped by Asian shares which climbed to an 11-week high overnight.
The dollar index, which measures the greenback against a basket of peers, was up 0.2 percent.
World stocks were set to post their first loss in five days on Monday, breaking a winning streak that saw them recover almost half their losses.
World stocks lost some of the shine provided by Boeing’s strong results as the dollar fluttered on Wednesday.
World stocks pulled out of a two-day dive and were eyeing their second best start to a year ever on Wednesday.
“We should not confuse a mature bull market with a decrepit one,” Goldman Sachs said in its 2018 outlook to clients.
World stocks edged lower on Friday on signs that U.S. tax reforms could be delayed.
World stocks rose on Monday and copper touched a three-year high as upbeat Chinese data drove optimism about the China's economy, as oil prices jump.