Stock markets around the world rallied on Tuesday, helped by solid corporate earnings reports and higher oil prices supporting energy shares, while the yen again retreated sharply against the dollar.
MSCI's broad gauge of global stocks climbed nearly 1.1 per cent, its best session in about a month. The three major US indexes each ended up about 1.3 per cent and the pan-European FTSEurofirst 300 index advanced 0.9 per cent.
The yen fell against the dollar for a second day as a Japanese economic adviser reiterated that the country was prepared to intervene in currency markets.
Against a basket of currencies, the dollar edged up 0.2 per cent.
The Dow Jones industrial average rose 222.44 points, or 1.26 percent, to 17,928.35, the S&P 500 gained 25.7 points, or 1.25 per cent, to 2,084.39 and the Nasdaq Composite added 59.67 points, or 1.26 per cent, to 4,809.88.
Equities globally benefited from investors' belief that the US Federal Reserve is less likely to raise interest rates in June in light of recent weaker-than-expected economic data, said Peter Kenny, senior market strategist at Global Markets Advisory Group in Berkeley Heights, New Jersey.
“Markets are banking on an unchanged interest rate narrative, not only in June but for the foreseeable future, meaning certainly to the end of the summer,” Kenny said.
The S&P 500 tallied its best day in two months, helped by Amazon, following a bullish analyst report, and Allergan, after the US pharmaceutical company posted strong earnings.
Results from Credit Suisse and jewelry maker Pandora helped the European index.
With US corporate earnings season largely completed, the proportion of raised forecasts by companies to those that are lowered is the healthiest it has been since 2011, according to Thomson Reuters data.
“Perhaps there is a perception that there is some daylight ahead for corporate earnings growth,” said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.
Greek shares hit 2016 highs after euro zone finance ministers offered to grant Greece some debt relief, causing Greek 10-year bond yields to fall below 8 per cent for the first time since early December.
Brazil's benchmark Bovespa stock index gained 3.8 per cent and the country's currency jumped with impeachment proceedings against leftist President Dilma Rousseff back on track, fueling optimism that a new pro-market administration could take over on Thursday.
The yen slid 0.9 per cent against the dollar as risk appetite improved for a second straight session, undermining traditional safe havens such as the Japanese currency.
“Risk appetite is naturally tied to the belief that we're in an ultra-low-yield environment and investment managers can't simply sit here,” said Jeremy Cook, chief economist at payments company World First in London.
Repeated verbal warnings from Japan over the weekend and on Tuesday that it was prepared to step in to weaken the currency have also held off investors.
Oil prices jumped after a late burst of buying driven in part by expectations that record US crude inventories would not swell by as much as they have in recent weeks. Crude supply outages in Canada, Nigeria and elsewhere also boosted prices.
US crude settled up 2.8 per cent at $44.66 a barrel, while benchmark Brent crude settled up 4.3 per cent at $45.52 a barrel. Oil prices have recovered some ground after touching 12-year lows earlier in 2016.
Benchmark 10-year Treasury notes gained 2/32 in price to yield 1.7543 per cent, down from 1.76 per cent on Monday.
The US government saw strong demand for its $24 billion auction of three-year notes.