By Chuck Mikolajczak

NEW YORK (Reuters) -Global stocks rallied on Monday while U.S. Treasury yields climbed after reports that President Donald Trump's administration may take a more targeted approach to tariffs than previously believed, boosting risk appetite.

Trump's administration is likely to exclude a set of sector-specific tariffs while applying reciprocal levies on April 2, the Wall Street Journal and Bloomberg reported.

"The default position for today's investor is to be very worried about changes that the administration has proposed - whether or not there are tariffs imposed or if he repeals them, or if he delays them, it just causes extreme volatility in the market," said Peter Andersen, founder of Andersen Capital Management in Boston.

Equities have been under pressure in recent weeks, weighed down by uncertainty over the potential tariffs and damage they could inflict on the global economy as well as on corporate profits.

A string of economic indicators has also pointed to cooling consumer sentiment as tariff concerns grew.

Data on Monday showed S&P Global's flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, increased to 53.5 this month from 51.6 in February. A reading above 50 indicates expansion.

However, concerns about tariffs and the sharp cuts in government spending continued to dent sentiment, as the survey's business confidence measure dropped to the second lowest reading since 2022.

The Dow Jones Industrial Average rose 526.18 points, or 1.26%, to 42,515.62, the S&P 500 rose 87.01 points, or 1.55%, to 5,755.38 and the Nasdaq Composite rose 353.95 points, or 1.99%, to 18,139.45.

MSCI's gauge of stocks across the globe rose 9.24 points, or 1.10%, to 851.23 after hitting a two-week high of 851.46.

The MSCI index had fallen nearly 8% from its mid-February record through its March 13 closing low, before snapping a four-week string of declines last week.

The pan-European STOXX 600 index rose 0.11 points as HCOB's preliminary composite euro zone Purchasing Managers' Index, compiled by S&P Global, rose to 50.4 this month from February's 50.2, its highest since August.

In particular, business activity in Germany's private sector rose to 50.9 in March, its fastest rate in ten months, which helped lift the country's DAX index by about 0.3%.

Trump still plans to impose new reciprocal tariffs next week, but questions remain about the size of the duties and which countries will be targeted.

Trump said on Monday that any country that buys oil or gas from Venezuela will pay a 25 percent tariff on trades made with the United States.