China and the United States on Thursday agreed to hold high-level talks in early October in Washington, boosting markets as investors hoped for a thaw in the trade war between the world’s two largest economies that has taken a toll on global growth.

The meeting was arranged during a phone call between Chinese Vice Premier Liu He and US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin, China’s commerce ministry said in a statement on its website. China’s central bank governor Yi Gang was also on the call.

US President Donald Trump had previously said the sides expected to meet in September. News that the face-to-face talks were scheduled sent Asian, European and US stock markets higher, with all three major US stock indices touching over a month high.

European shares also rose for a second straight day on Thursday, with the pan-European STOXX 600 index hitting its highest level since Aug. 1.

On Sunday, Washington began imposing 15% tariffs on an array of Chinese imports, while China began placing duties on US crude oil. On Monday, China said it had lodged a complaint against the United States at the World Trade Organization.

Washington plans to increase the tariff rate to 30% from the 25% duty already in place on $250 billion worth of Chinese imports from Oct. 1.

China’s Commerce Ministry said its trade team will consult with its US counterpart in mid-September in preparation for negotiations in early October, and both sides agreed to take actions to create favorable conditions.

“Lead negotiators from both sides had a really good phone call this morning,” China’s commerce ministry spokesman Gao Feng said in a weekly briefing. “We’ll strive to achieve substantial progress during the 13th Sino-US high-level negotiations in early October.” Gao also said Beijing opposes any escalation in the trade war.

A spokesman for the US Trade Representative’s office confirmed that Lighthizer and Mnuchin spoke with Liu and said they agreed to hold ministerial-level trade talks in Washington “in the coming weeks”.

Analysts noted that investors remain nervous and markets could react with volatility on comments or actions from either side.

No details were immediately available about any goodwill gestures that might have been promised by either side during the call.

On Tuesday, Trump had warned he would be tougher on Beijing in a second term if trade talks dragged on, compounding market fears that disputes between the United States and China could trigger a US recession.

Trump remained silent on Twitter about the newly agreed talks, and none of his key economic aides appeared on morning talk shows. Trump had lashed out at Beijing in past months, frustrated by its failure to follow through on purchases of US farm products that he said were agreed in his meeting with Chinese President Xi Jingping in June.

China, for its part, has been stung by Washington’s failure to make good on its promise to ease restrictions on Chinese tech giant Huawei Technologies Co Ltd. The escalating tit-for-tat tariffs are taking a toll on China’s economy, which the country’s top trade negotiator Vice Premier Liu He said faces increasing downward pressure.

Chinese leaders will have a packed schedule this month, gearing up for National Day celebrations scheduled for Oct. 1.

They will also hold a key meeting in October to discuss improving governance and “perfecting” the country’s socialist system, state media has said.

Meanwhile, US services sector activity accelerated in August and private employers boosted hiring, suggesting the economy continued to grow at a moderate pace despite trade tensions which have stoked financial market fears of a recession.

The upbeat reports on Thursday came on the heels of data this week showing the manufacturing sector contracted for the first time in August as the trade war between the United States and China intensified.

But given the erosion of business confidence as a result of the year-long trade impasse and the threat it poses to the longest economic expansion in history, the Federal Reserve is still expected to cut interest rates again this month.

The US central bank lowered borrowing costs in July, citing growing risks to the economy, now in its 11th year of expansion, from the trade fight and slowing global growth. China and the United States on Thursday agreed to hold high-level trade talks in early October in Washington, according to the Chinese commerce ministry.

“Extreme uncertainty over trade issues has soured the sentiment of some in the business community, but companies continue to hold on tight to the workers they have and are also onboarding new workers at a fast clip,” said Chris Rupkey, chief economist at MUFG in New York. “This isn’t what a recession is supposed to look like.” The Institute for Supply Management said its non-manufacturing activity index increased to a reading of 56.4 in August from 53.7 in July. A reading above 50 indicates expansion in the sector, which accounts for more than two-thirds of US economic activity.

Agencies