On Monday the Paris CAC 40 index closed 1.2% higher while the Frankfurt gained 1.7%.
London and Wall Street were closed for holidays, but US futures were higher while Asia struggled.
Analysts said the latest unexpected salvos from the White House highlighted the uncertain path investors are having to walk owing to the President’s volatile policy pivots.
“The stock market seems to dance to Trump’s tune: first a threat, then a pullback, quickly followed by a rebound as speculative investors anticipate a concession from the US President,” said Jochen Stanzl, chief market analyst at CMC Markets trading platform.
“This morning’s confirmation of such expectations reinforces the so-called ‘Trump Pattern’, which is increasingly seen as a successful strategy for risk-tolerant investors.”
The dollar remained under pressure after dropping on Friday.
Oil prices fluctuated and ended flat, with producers’ group Opec-plus expected this week to continue to raise production despite low prices, after pressure from Trump.
Steel saga
Investors have also fretted over Trump’s economic policies, with US long-term government bond yields surging last week over concerns that his tax relief and spending cuts plan – which was approved by the House – will increase the US debt pile.
Traders are also looking to Wednesday’s release of minutes from the Fed’s earlier May policy meeting, hoping for an idea about the central bank’s views on the economy.
That is followed by the Fed’s preferred measure of inflation – US personal consumption expenditures – on Friday.
In company news, shares in Seoul-listed Samsung rose almost 1% despite Trump’s threat of tariffs on smartphone makers.
In Tokyo, Nippon Steel rallied as much as 7.4% after Trump threw his support behind a new “partnership” between the Japanese firm and US Steel. It ended up 2.1%.
US Steel soared 21% in New York on Friday.
In Europe, shares in steel giant ThyssenKrupp surged 8.7% after the firm said it planned a major overhaul that will split the vast conglomerate into several standalone businesses.
Swedish carmaker Volvo rose more than 2% after it announced it would cut 3000 jobs as part of a $1.9 billion cost-cutting plan.
Key figures
Paris – CAC 40: UP 1.2% at 7828.13 points
Frankfurt – DAX: UP 1.7% at 24,027.65
Tokyo – Nikkei 225: UP 1.0% at 37,531.53 (close)
Hong Kong – Hang Seng Index: DOWN 1.4% at 23,282.33 (close)
Shanghai – Composite: DOWN 0.1% at 3,346.84 (close)
Euro/dollar: UP at $1.1382 from $1.1369 on Friday
Pound/dollar: UP at $1.3563 from $1.3535
Dollar/yen: UP at 142.81 yen from 142.57 yen
Euro/pound: DOWN at 83.91 pence from 83.96 pence
West Texas Intermediate: UP 0.1% at US$61.62 per barrel
Brent North Sea Crude: UP 0.1% at US$64.88 per barrel
New York – Dow: Closed for a holiday
London – FTSE 100: Closed for a holiday
-Agence France-Presse