NEW YORK (Reuters) - U.S. and European stock indexes gained on Wednesday after news that U.S. President Donald Trump planned to delay tariffs on auto imports, offsetting earlier pressure on equities from weak U.S. and Chinese economic data that helped depress bond yields.

FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 14, 2019. REUTERS/Brendan McDermid/File Photo

Trump is expected to delay a decision on tariffs on imported cars and parts by up to six months, three administration officials told Reuters. Fears about an escalating global trade war, particularly following a spike in U.S.-China tensions, have rattled markets over the past week.

Meanwhile, U.S. Treasury Secretary Steven Mnuchin said he will likely travel to China soon to continue talks as Washington and Beijing seek to resolve their months-long trade war.

Major U.S. and European stock indexes ended higher after falling earlier in the session.

On Wall Street, the Dow Jones Industrial Average rose 115.97 points, or 0.45%, to 25,648.02, the S&P 500 gained 16.55 points, or 0.58%, to 2,850.96 and the Nasdaq Composite added 87.65 points, or 1.13%, to 7,822.15.

“The market was selling but rebounded,” said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana. “It’s symptomatic of a market that’s in short-term mode right now and what’s driving that right now is trade.”

The pan-European STOXX 600 index rose 0.46%. Europe’s autos and suppliers index jumped 2.0%.

MSCI’s gauge of stocks across the globe gained 0.49%.

The positive trade developments lifted risk sentiment that had been dampened earlier in the session by weak economic data.

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China reported surprisingly weaker growth in retail sales and industrial output for April. In the U.S., retail sales unexpectedly fell in April as households cut back on purchases of motor vehicles and a range of other goods, while other data showed a drop in industrial production last month.

U.S. Treasury yields fell, with the two-year yield hitting its lowest in 15 months after the disappointing U.S. data raised expectations the Federal Reserve will cut interest rates this year.

Benchmark 10-year notes last rose 14/32 in price to yield 2.3715%, from 2.419% late on Tuesday.

Yields on German bonds also sank deeper into negative territory.

“You have a tale of two markets,” said Willie Delwiche, investment strategist at Baird in Milwaukee. “U.S. stocks, particularly U.S. large-cap stocks, have rallied in response to ... trade-related headlines. But the curious thing is that the bond market has not responded.”

“It suggests to me that there is cause for some global concern in terms of the economy,” Delwiche said.

The dollar index, which measures the greenback against a basket of six major currencies, rose 0.06%, with the euro down 0.04% to $1.1199.

Oil futures rose as worries that rising tensions in the Middle East could hit global supplies overshadowed an unexpected build in U.S. crude inventories.

U.S. crude rose 0.4% to settle at $62.02 a barrel, while Brent settled at $71.77, up 0.7%.

(Graphic: World FX rates in 2019 - tmsnrt.rs/2egbfVh)