Wall Street stocks rebounded on Monday from steep pre-weekend falls as US President Donald Trump softened his posture on China following earlier threats of large tariffs.

European stock markets made modest gains while Asia's leading stock markets began the week in the red as they caught up with Wall Street's sharp losses on Friday.

Gold reached a fresh record high thanks to its status as a safe haven investment.

"Things have calmed down almost as dramatically as the flare up on Friday when Donald Trump threatened 100 percent tariffs on China," said City Index and Forex.com analyst Fawad Razaqzada.

Trump, who on Friday announced "massive" tariffs due to Chinese curbs on rare earths exports, backed off from that stance, saying in a Sunday social media post "it will all be fine," and adding that the United States wants to "help" China.

Major Wall Street indices that fell hard on Friday recovered a large chunk of their losses after Trump's weekend pivot.

"Trump came back and made it very clear that everything is going to be fine with China," said Adam Sarhan of 50 Park Investments. "This looks like a relief rally."

The S&P 500 gained 1.6 percent to 6,654, while the Nasdaq rose 2.2 percent to 22,694. The Dow Jones put on 1.3 percent to 46,067.

Earnings season gets underway in earnest this week, with reports from JPMorgan Chase, Goldman Sachs and other financial heavyweights on Tuesday.

The IMF and World Bank's semi-annual gathering of finance ministers and central bank governors also began in Washington on Monday. (AFP)