(Adds U.S. market open, byline, dateline; previous LONDON)
* European stocks with Asian exposure rise, chipmakers gain
* Dollar rises as trade war hits Asian economies
* U.S. yields rise as stocks advance on Huawei news
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Herbert Lash
NEW YORK, May 21 (Reuters) - Global equity markets rose on Tuesday, led by chipmakers and companies exposed to Asia, after the United States temporarily eased trade restrictions imposed on China's Huawei Technologies HWT.UL , while the dollar rose on a flight to quality.
Major European stock markets rose and Chinese indices gained more than 1 percent after the Commerce Department late on Monday allowed Huawei to buy U.S. goods until Aug. 19 to maintain existing telecoms networks and provide software updates to its smartphones. of U.S. suppliers to Huawei, including Qualcomm QCOM.O , Intel Corp INTC.O and Lumentum Holdings Inc LITE.O rose, with the PHLX Semiconductor Index .SOX up more than 2%.
In Europe, the tech sector .SX8P rose 1.49% after losing almost 3% on Monday, as chipmakers AMS AG AMS.S of Austria, Franco-Italian STMicroelectronics STM.PA and Germany's Infineon IFXGn.DE all gained.
The Trump administration is very sensitive to stock market declines and the Huawei stay of execution may provide a short-lived relief, said Kristina Hooper, chief global market strategist at Invesco in New York.
"The 800-pound gorilla is U.S.-China trade relations and those are deteriorating," Hooper said.
"We might get positive news on relatively small trade developments like this extension for Huawei, but that doesn't change the bigger picture in regard to the U.S. and China."
MSCI's gauge of stock performance in 47 countries across the globe .MIWD00000PUS gained 0.58% while the pan-European STOXX 600 index .STOXX rose 0.40%.
Earlier in Asia, China's Shanghai Composite index .SSEC closed up 1.23% and the blue-chip CSI300 index .CSI300 ended 1.35% higher.
On Wall Street, the Dow Jones Industrial Average .DJI rose 185.66 points, or 0.72%, to 25,865.56. The S&P 500 .SPX gained 27.48 points, or 0.97%, to 2,867.71 and the Nasdaq Composite .IXIC added 96.20 points, or 1.25%, to 7,798.57.
Signs that Asia is feeling the pinch from the U.S.-Sino trade spat pushed the dollar to a four-week high, with higher U.S. Treasury yields helping support the move.
Data showed economic growth in Singapore was its lowest in nearly a decade in the first quarter, while in Thailand it was at its lowest in four years, raising worries major Asian economies are getting hurt by global trade tensions. dollar index .DXY fell 0.09%, with the euro EUR= up 0.11% to $1.1182. The Japanese yen JPY= weakened 0.46% versus the greenback at 110.59 per dollar.
U.S. Treasury yields edged higher, lifted by equity market gains and higher risk appetite overall after the United States eased the trade restrictions imposed on Huawei last week. The move was a step in the right direction in terms of calming escalating trade tensions.
"This is partly optimism in equities causing a reversal of the moves we saw last week," said Subadra Rajappa, head of U.S. rates strategy at Societe Generale (PA:SOGN) in New York, as well as a reduction in the markets' rate cut forecasts.
"There's optimism about progress in the ongoing U.S.-China trade talks," she added.
Benchmark 10-year notes US10YT=RR last fell 7/32 in price to yield 2.437%.
Brent crude, the international benchmark, rose on escalating U.S.-Iran tensions and amid expectations that members of the Organization of the Petroleum Exporting Countries will continue to curb supply this year.
Gains were capped and West Texas Intermediate, the U.S. standard, fell on concerns that a prolonged trade war between Washington and Beijing could lead to a global economic slowdown.
Brent crude futures LCOc1 rose 4 cents to $72.01 per barrel. U.S. crude CLcv1 fell 1 cent to $63.09 per barrel.