Near noon AEDT on Tuesday, the benchmark S&P/ASX200 index was up 37.4 points, or 0.45 per cent, to 8,416.8, while the broader All Ordinaries was up 45.1 points, or 0.52 per cent, to 8,673.5.
Overnight and on Tuesday morning, President Trump delayed implementing 25 per cent tariffs on Mexico and China for a month, following the leaders of those countries pledging they would take steps to curb the flow of illegal drugs, especially fentanyl.
No deal has yet materialised with China, the third country that Mr Trump had pledged to impose levies on, but Capital.com analyst Kyle Rodda said there was now growing confidence - if not complacency - that the world would avoid a destructive global trade war.
"Even still, the uncertainty generated by the threats, even if not followed through with, will have a negative impact on economic activity as investment, purchasing and hiring decisions are disrupted," Mr Rodda wrote.
There were also indications that Mr Trump's next target in the tariff drama would be the European Union.
Pepperstone head of research Chris Weston said it had been a wild day in markets with big intraday reversals playing out in equities, currency and cryptocurrency.
While there had been some constructive developments, Mr Weston argued that the coast was not yet fully clear to pile into risk with conviction, with another tariff-related selloff still highly possible.
The Australian dollar, which Monday hit a nearly five-year low of 60.88 US cents, had rebounded against its US counterpart, buying 62.06 US cents, from 61.27 US cents around 5pm on Monday.
Bitcoin was back up above $US101,000 after falling as low as $US92,000 on Monday.
At midday five of the ASX's 11 sectors were higher, four were modestly lower and industrial and consumer discretionary shares were collectively flat.
Tech had the biggest gains, rising 1.5 per cent. Appen had climbed 9.4 per cent, Megaport had advanced 7.5 per cent and Wisetech Global was up 1.8 per cent.
In health care, Pro Medicus was up 4.6 per cent to a fresh all-time high of $282.29 as the health imaging company announced another US contract signing, this time a $53 million, seven-year contract with a Florida health care chain.
In the heavyweight mining sector, Fortescue was up 1.5 per cent, BHP had added 0.5 per cent and Rio Tinto had advanced 1.8 per cent.
Goldminers were higher after the precious metal overnight hit an all-time high of $US2,830 an ounce, with Newmont adding 1.0 per cent and Regis Resources climbing 1.6 per cent.
All of the big four banks were up, with Westpac advancing the most, by half a per cent.
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