US stocks climbed on Wednesday as worries over a global trade war took a back seat and tech stocks pushed Nasdaq Composite index to a record high.

The S&P 500 gained 0.9 per cent to 2,772.35 points, led by the financials, materials and telecommunications sectors.

The Dow Jones Industrial Average index rose 1.4 per cent to 25,146.39 points, driven by materials and industrial stocks. Both gauges closed at their highest level since mid-March.

The S&P 500 index and Nasdaq Composite both rose for a fourth consecutive day, but the latter managed to close at a record 7,689.24 with an overall gain of 0.7 per cent.

One of the stock highlights was Tesla, which surged over 9 per cent after co-founder and chief executive Elon Musk released upbeat targets for the electric vehicle maker.

Meanwhile, data from the Commerce Department showed the US trade deficit fell to $46.2bn in April, a seven-month low. But the impact of that on currency and fixed income markets was outweighed by hints from European Central Bank policymakers that the central bank might wind down its quantitative easing programme this year.

The US dollar was weaker as expectations for tighter monetary policy in Europe propped up the euro. The DXY index, which tracks the buck against a basket of global peers, fell 0.25 per cent to 93.65.

The yield on the benchmark 10-year US Treasury was up 5.6 basis points to 2.975 per cent, after the ECB policymakers’ comments triggered a sell-off in European government bonds. Yields rise as prices fall.

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