* All three major U.S. stock indexes in the black
* European, emerging equities markets rally
* Pound up 1% after PM Johnson's setback in parliament
* Hong Kong scraps extradition bill, boosting sentiment (Updates to U.S. market open, changes dateline (previously MILAN), byline)
By Stephen Culp
NEW YORK, Sept 4 (Reuters) - Stock indexes worldwide rebounded on Wednesday, and the euro and pound sterling bounced back as easing geopolitical concerns and upbeat economic data from China brought buyers back to the equities market.
A parliamentary vote in Britain raised hopes that the nation's no-deal exit from the European Union could be postponed, Hong Kong withdrew the contentious extradition bill at the heart of recent protests and political risks in Italy appeared to be easing, all of which helped revive investor risk appetite.
China's services sector expanded in August at its fastest pace in three months as a jump in new orders prompted the biggest hiring increase in over a year, according to the Caixin/Markit services purchasing managers index (PMI).
"Markets like the Brexit and Hong Kong news, but we think this is just a short term headline and the problems are likely to re-emerge," said David Carter, chief investment officer at Lenox Wealth Advisors in New York. "Let's not pop the champagne because we had one good day of geopolitical headlines."
The U.S. trade deficit shrank in July, according to the Commerce Department, but bilateral gaps in goods trade with key trading partners widened. The closely watched deficit with China grew by 9.4% as the bruising Sino-U.S. trade war rages on and deficit with the European Union rose to a record high.
The Dow Jones Industrial Average rose 167.9 points, or 0.64%, to 26,285.92, the S&P 500 gained 18.91 points, or 0.65%, to 2,925.18 and the Nasdaq Composite added 64.05 points, or 0.81%, to 7,938.21.
The political developments in Europe and Hong Kong helped fuel a rally in European stocks, sending them to one-month highs.
The pan-European STOXX 600 index rose 0.82% and MSCI's gauge of stocks across the globe gained 0.92%.
Emerging markets equities were led higher by Hong Kong stocks on reports that the government might scrap its controversial extradition bill.
Emerging market stocks rose 1.81%. MSCI's broadest index of Asia-Pacific shares outside Japan closed 1.83% higher, while Japan's Nikkei rose 0.12%.
U.S. Treasuries were essentially flat but the yield curve steepened slightly as longer-dated yields edged higher on calming geopolitical concerns.
Benchmark 10-year notes last fell 4/32 in price to yield 1.4775%, from 1.466% late on Tuesday.
The 30-year bond last fell 20/32 in price to yield 1.9759%, from 1.95% late on Tuesday.
Fresh doubts about the scale of the European Central Bank's stimulus package caused the Euro to rebound, while the dollar continued its retreat from a more than two-year high against a basket of major world currencies. The pound sterling recovered as efforts to stop a no-deal Brexit advanced.
The dollar index fell 0.44%, with the euro up 0.44% to $1.102.
The Japanese yen weakened 0.21% versus the greenback at 106.18 per dollar, while sterling was last trading at $1.2188, up 0.86% on the day.
Oil prices rose with the tide, boosted by easing geopolitical tensions and the positive news about China's services sector.
U.S. crude rose 3.39% to $55.77 per barrel and Brent was last at $60.13, up 3.21% on the day.
Gold dipped on receding global political risks, but remaining economic concerns in the shadow of the U.S.-China trade war kept the precious metal near a six-year peak.
Spot gold fell 0.03% to $1,546.13 an ounce.
Copper rose 2.42% to $5,745.50 a tonne.
Three-month aluminum on the London Metal Exchange rose 1.20% to $1,774.00 a tonne. (Reporting by Stephen Culp; additional reporting by Danilo Masoni and Shinichi Saoshiro; Editing by Steve Orlofsky)