Asian investors extended a rally on Tuesday, tracking another Wall Street record as investors cheered a fresh trade deal between the United States and Mexico that brings an end to one row picked by Donald Trump that had rattled global markets.

The agreement raises hopes the two-decade-old North American Free Trade Agreement (Nafta), torn up by the White House soon after Mr Trump's election, can be salvaged after Canada rejoins talks on Tuesday.

The pact was described by the US president as "a big day for trade" and it sent the S&P 500 and Nasdaq to fresh all-time highs, while the Dow broke 26,000 for the first time since January.

Details of gains and concessions in the deal were only starting to emerge on Monday. Mr Trump threatened he still could put tariffs on Canadian-made cars if Canada did not join its neighbours and warned he expected concessions on Canada's dairy protections.

"I think with Canada, frankly, the easiest we can do is to tariff their cars coming in. It's a tremendous amount of money and it's a very simple negotiation. It could end in one day and we take in a lot of money the following day," Mr Trump said.

Mr Trump and Canadian Prime Minister Justin Trudeau discussed trade in a telephone call on Monday and "agreed to continue productive conversations," White House spokeswoman Sarah Sanders said in a statement.

Monday's agreement comes after officials from Washington and Beijing held talks last week aimed at easing trade tensions that have seen them hit each other with tariffs on tens of billions of dollars worth of goods.

While the meeting did not achieve any breakthrough, the fact they took place was seen as a good sign.

Stephen Innes, head of Asia-Pacific trading at OANDA, said dealers were "in a festive mood" as the deal removed "one major hurdle that has been haunting North American investors for months".

He added: "Markets are revelling in any trade positives... After all, a deal is a deal."

Equities, which enjoyed a healthy run after Federal Reserve boss Jerome Powell indicated on Friday the bank would not aggressively lift interest rates, continued to rise.

Tokyo went into the break 0.6 percent higher with Toyota surging almost two percent after saying it will invest about $500 million into Uber as part of a deal to work on mass-producing self-driving vehicles.

Hong Kong added 0.5 percent and Shanghai rose 0.2 percent.

Sydney climbed 0.7 percent and Singapore was 0.8 percent higher, with Seoul adding 0.4 percent and Taipei 0.6 percent stronger.

Mexican Foreign Minister Luis Videgaray said the deal in no way serves as a payment for a border wall.

The US President's promise to make Mexico pay billions of dollars for a wall to stop illegal immigration hasn't been a part of recent conversations between the nations as they worked to update Nafta, he said.

"It was indeed a point of tension, of public and notorious differences between Mexico and the United States, but I think that the decision we made not to allow a difference to define the rest of the relationship, that we could see beyond that difference, today is giving very obvious results," Mr Videgaray said in an interview with Bloomberg in Washington.

If talks with Canada are not wrapped up by the end of this week, Mr Trump plans to notify Congress that he has reached a deal with Mexico, but would be open to Canada joining, US Trade Representative Robert Lighthizer told reporters.

The White House said Mr Trump will sign the deal in 90 days. Congress has to approve it.

"There are still issues with Canada but I think they could be resolved very quickly," a senior trade official told Reuters in an interview.