(Aug 30): Stocks in Asia were set to track a U.S. rally after China indicated it wouldn’t immediately retaliate against the latest American tariff increase. Treasuries edged lower.

Futures climbed in Japan, Hong Kong and Australia on the final trading day of a tumultuous month dominated by the trade war. The S&P 500 Index rose for a second day after a spokesman for China’s commerce ministry said that escalating the conflict won’t benefit either side and that it was more important to discuss removing the extra duties. A gauge of the dollar hit a two-year high.

Investor sentiment remains fragile after President Donald Trump’s recent pronouncements on trade and as investors await a resolution. Trump said the U.S. and China were scheduled to have a conversation about trade Thursday. Meanwhile, U.S. economic growth slowed in the second quarter by more than initially reported, on weaker readings for categories including exports and inventories. Still, consumer spending remained robust, topping forecasts.

“Positive news on trade has investors looking to move back into some of the equity markets and maybe a little more risk on,” Chris Gaffney, president of world markets at TIAA, said by phone. “The GDP number -- while there was a slight pullback in second-quarter estimates, consumers still are looking strong. That’s the key. The earnings component was very good -- corporate profits are looking robust.”

Elsewhere, West Texas crude held at about $56 a barrel. Italian bonds rose as the country moved toward forming a new government.

Events to keep an eye on this week:

    Bank of Korea policy decision and briefing is on Friday.
    Euro-zone CPI data for August is also due Friday.

Here are the main moves in markets:
Stocks

    The S&P 500 Index increased 1.3%
    Futures on Japan’s Nikkei 225 advanced 1.1%.
    Hang Seng futures earlier added 0.7%.
    Futures on Australia’s S&P/ASX 200 Index rose 0.7%.

Currencies

    The yen was at 106.51 per dollar.
    The offshore yuan traded at 7.1439 per dollar.
    The Bloomberg Dollar Spot Index rose 0.2% to the highest since May 2017.
    The euro bought $1.1057.
    The British pound was at $1.2182 after slipping Thursday.

Bonds

    The yield on 10-year Treasuries gained one basis point to 1.49%.

Commodities

    West Texas Intermediate crude increased 1.5% to $56.61 a barrel.
    Gold was little changed at $1,527.61 an ounce. - Bloomberg