Trump wants Europe to spend more on security but it may also mean that stock markets overseas do better than the U.S. now.

U.S. stocks climbed after President Donald Trump pulled back on some of his tariffs, raising hopes he may avoid a worst-case trade war that grinds down economies and sends inflation higher.

Major stock indexes fell on Tuesday as the United States hit Canada, Mexico and China with steep tariffs, while the euro climbed to a three-month peak against the U.S. dollar as German political parties agreed to a 500 billion euro infrastructure fund.