After the wild gyrations witnessed last week, markets got off to a relatively stable start following news Friday that the White House would exempt smartphones, semiconductors, computers and other devices from painful "reciprocal" levies.

The announcement provided a much-needed injection of optimism for investors who had been sent scurrying for the hills in the wake of the US president's tariff flip-flops and tit-for-tat measures by China.

All three main indexes on Wall Street finished solidly higher, helped by comments from a top Federal Reserve official that the bank was prepared to step in to support financial markets.

And Asia followed suit, with tech firms helping push Hong Kong more than two percent higher, while Tokyo, Shanghai, Sydney, Seoul, Singapore, Wellington, Taipei and Manila all well up.

"After a period of chaotic price action, chinks of light poke through the forest canopy providing a much-needed guide to the entities that price risk and liquidity for a living, which in turn, may see liquidity conditions improve and a relative calm return to markets," said Chris Weston at Pepperstone.

However, Trump looked to temper the remarks Sunday, saying the exemptions had been misconstrued and writing on his Truth Social platform that "NOBODY is getting 'off the hook'... especially not China which, by far, treats us the worst!"

He said he would announce new tariffs on semiconductors "over the next week".

His commerce secretary, Howard Lutnick, earlier said chip levies would likely be in place "in a month or two".

Chinese President Xi Jinping said Monday that protectionism "leads nowhere" and that a trade war would have "no winners", days after Beijing hit US goods with 125 percent duties, but suggested it would not retaliate further in the future.

Washington has ramped up tariffs on Chinese goods to 145 percent and excluded it from a 90-day pause of crippling levies the White House announced on Wednesday.

As well as fuelling a panic on stock markets, the uncertainty caused by Trump's trade policy has also hit the dollar amid concerns about the outlook for the world's top economy.

The greenback extended losses against its major peers Monday, with the euro at a three-year high and the Swiss franc at its strongest in 10 years.

Treasuries also remain under pressure amid worries that China and other nations could dump their vast holdings which could call into question the US position as a rock-solid safe haven.

And gold, a go-to asset of safety in times of turmoil, hit a new peak of $3,245.75 Monday, helped by the weaker dollar.

Concerns about the impact of the measures saw Boston Fed chief Susan Collins tell the Financial Times that officials would "absolutely be prepared" to deploy its various tools to help stabilise the financial markets if the need arose.

In a separate interview with Yahoo Finance, she said: "The higher the tariffs are, the more the potential slowdown in growth as well as elevation and inflation that one would expect."

She added that she expected inflation to rise "well above" three percent this year, but saw no "significant" economic downturn.

- Key figures around 0230 GMT -

Tokyo - Nikkei 225: UP 1.6 percent at 34,115.52 (break)

Hong Kong - Hang Seng Index: UP 2.4 percent at 21,416.93

Shanghai - Composite: UP 0.8 percent at 3,263.91

Dollar/yen: DOWN at 142.50 yen from 143.49 yen on Friday

Euro/dollar: UP at $1.1396 from $1.1359

Pound/dollar: UP at $1.3118 from $1.3088

Euro/pound: UP at 86.88 pence from 86.80 pence

West Texas Intermediate: DOWN 0.3 percent at $61.34 per barrel

Brent North Sea Crude: DOWN 0.3 percent at $64.58 per barrel

New York - Dow: UP 1.6 percent at 40,212.71 (close)

London - FTSE 100: UP 0.6 percent at 7,964.18 (close)

dan/dhc

INDEX CORP.

Dow