US stocks recovered further on Monday from last week's selloff, with the S&P 500 posting its biggest one-day percentage gain since April as worries eased about a conflict between the United States and North Korea.
That news helped ease investor worries about the risk of a conflict between the United States and North Korea, improving sentiment toward riskier assets.
Still, with joint South Korean-US military exercises scheduled and North Korea celebrating "Liberation Day" Tuesday, volatility could return to markets, analysts said.
North Korean leader Kim Jong Un said he would watch the United States' actions for a while longer before deciding whether to fire missiles towards the US island territory of Guam, the nation's official news agency said.
The dollar index, which tracks the greenback against six major currencies, was last up 0.4 percent. Apple was up 1.5 percent, while the S&P 500 technology index rose 1.6 percent. Australian stocks closed up 0.5%.
Korea made 'wise' decision for stepping back
A military source said, " Kim Jong-un's latest wait-and see tactics seems only meant to justify his next provocation". Pacific territory of Guam , home to about 7,000 U.S. troops and 160,000 people.
Many Japanese traders stayed away from the market for Japan's traditional "obon" holiday. Profit rose to $2.25 a share from $1.97 a year earlier, 4 cents higher than targeted.
The Swiss franc and the yen are often sought in times of geopolitical tension or global financial stress, partly because both Switzerland and Japan have big current account surpluses.
The Swiss franc, which gained 1.1% on 9 August as the war of words over the Korean peninsula intensified, held steady at 0.9719 per dollar.
US DATA: The other potential driver in markets will be upcoming USA economic data, including monthly inflation figures, which could go a long way to determining expectations for the pace at which the Federal Reserve raises interest rates.
Currency market strategists also pointed to a general recovery by the dollar after its worst four months since 2011 against the euro and the basket of currencies .DXY used to measure its strength. Ex-auto sales had been expected to increase by 0.3 percent.
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USA crude rose 0.49 percent to $49.06 per barrel after falling as low as $48.37 and Brent was last at $52.27, up 0.33 percent after hitting a low of $51.60.
In debt markets, yields on low-risk German and U.S. government bonds rose.
United States 10-year Treasury yields rose 4 bps to 2.25%, up from a six-week low of 2.18% touched on Friday.
USA gold futures for December delivery were 0.9 percent lower at $1,279.20 an ounce.
Oil prices steadied somewhat after falling more than 2.5% son Monday to its lowest in about three weeks on the strength of the dollar and reduced refining in China. In late trade it rose 0.06 percent to $47.62 per barrel and Brent was last at $50.86, up 0.26 percent on the day.
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