REUTERS/Carlo Allegri

Stocks are rallying on Thursday after both China and the US said that trade talks would resume in October.

The talks are later than initially planned, but traders will still be breathing a sigh of relief after last weekend's hikes in tariffs, which sent markets plunging.

Elsewhere, the pound held steady after a huge round of debates over Brexit on Wednesday evening that might lead to a possible election in the UK.

View Markets Insider's homepage for more stories.

Stocks are rising on Thursday morning, as US-China trade talks are set to resume next month, after hikes in tariffs last weekend.

The talks are later than originally planned, but markets were buoyed by the news that Vice Premier Liu He spoke over the phone with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

Traders, however, are still hedging their bets on whether a deal will actually be made.

"Despite the gains in riskier assets, global investors are not getting carried away by this surge in optimism on news that the US and China are set to hold trade talks next month," said Han Tan, market analyst at FXTM.

"After all, investors have been seasoned by the tumultuous developments thus far in the year-long US-China trade conflict," he added.

Here's a look at the markets as of 11:20 a.m. in New York:

US stocks have jumped with the Dow Jones Industrial Average up 1.6%, the S&P 500 up 1.3%, and the Nasdaq up 1.6%.

up 1.6%, the up 1.3%, and the up 1.6%. In Europe, Germany's DAX rose 0.8% and the Euro Stoxx 50 rose 0.9%. Britain's FTSE 100 dropped 0.6%.

rose 0.8% and the rose 0.9%. Britain's dropped 0.6%. Asian markets closed higher with Japan's Nikkei up 2.3% and China's Shanghai Composite up 1.0%. Hong Kong's Hang Seng was flat after rising sharply on Wednesday.

up 2.3% and China's up 1.0%. Hong Kong's was flat after rising sharply on Wednesday. Oil prices have soared with West Texas Intermediate crude up 2% at $57.40, and Brent crude up 2.2% at $62.

Gold slumped 2% to $1,529.

The trade war has been hammering both the US and Chinese economies, and the knock-on effects on global trade have been dire — Germany, in particular, has suffered with reports today showing new factory orders were down in July, adding to the risk of an incoming recession.

The pound also held above the 1.22 mark against the US dollar, on the news that UK Members of Parliament pushed to block a no-deal Brexit on Wednesday evening, as new Prime Minister Boris Johnson faced his fourth successive defeat as leader.

Earlier this week the pound fell below 1.2 to the dollar, as the risk of a no-deal Brexit seemed much more likely.

"The Brexit path ahead could still invoke an election, which could raise the prospects of a no-deal Brexit again in the event that PM Johnson wins a clear majority," said Tan.

"Even the more market-friendly option of delaying Brexit would only serve to kick the can down the road, leaving the Brexit conundrum intact while keeping the Pound subdued. Prolonged uncertainties surrounding Brexit would only ensure that sterling remains susceptible to the UK's political risk," Tan added.

NOW WATCH: Mexico has just one store where you can legally buy a gun and it's located on a heavily-guarded military base