Positive economic data from Europe prodded the continent's stock markets higher Tuesday, as Wall Street stocks advanced ahead of a Federal Reserve decision on interest rates.
Lower-than-feared British unemployment, at 4.1 percent in the second quarter, and a rise in German investor confidence to a surprise 20-year peak boosted sentiment in Europe and offset lingering worries about a no-deal Brexit amid the latest conflict between London and Brussels.
London's FTSE 100 closed up 1.3 percent, the Frankfurt DAX 30 gained 0.2 percent and France's CAC 40 added 0.3 percent.
The German investor confidence reading by the ZEW institute surprised analysts, who were expecting a fall.
"Experts continue to expect a noticeable recovery of the German economy" following the pandemic-induced shock earlier this year, ZEW president Achim Wambach said in a statement.
"Stalled Brexit talks and rising Covid-19 cases could not dampen the positive mood."
In the US, stocks continued to advance after a two-week retreat, led by the tech-rich Nasdaq Composite Index, which closed up 1.2 percent.
Large tech shares including Facebook and Netflix were among the biggest winners. Apple finished modestly higher after it unveiled a new smartwatch and a new subscription service bundling music, news and TV.
Still, Wall Street analysts pointed to lingering uncertainty among investors.
"The markets are still kind of testing things out following the sell-off the last couple of weeks," said Briefing.com analyst Patrick O'Hare.
"The market is trying to see if this rebound is here to stay."
Investors are looking ahead to Wednesday's conclusion of a two-day Fed meeting, when Chair Jay Powell is expected to again signal near-zero interest rates for the foreseeable future.
Analysts are also watching for further details on the bank's new inflation targeting strategy, which will keep interest rates lower for longer in a bid to maximize employment, or perhaps comments from Powell on the outlook for the economic recovery.
"The Fed will be unable to be optimistic about the recovery until they see how the economy performs when the second wave of the coronavirus hits," paving the way for policymakers to keep economic stimulus in place, said OANDA senior analyst Edward Moya.
Powell "will likely reiterate the need for Congress to do more" to support the US economy, he added.
Talks on additional stimulus remain stalled in Congress.
Earlier, upbeat Chinese figures on retail sales and industrial output sent Asian stock markets higher.
The Chinese data also gave a boost to oil prices. Crude prices also garnered support from a hurricane nearing offshore oil production in the Gulf of Mexico.
- Key figures around 2050 GMT -
New York - Dow Jones: FLAT at 27,995.60 (close)
New York - S&P 500: UP 0.3 percent at 3,401.20 (close)
New York - Nasdaq: UP 1.2 percent at 11,190.32 (close)
London - FTSE 100: UP 1.3 percent at 6,105.54 (close)
Frankfurt - DAX 30: UP 0.2 percent at 13,217.67 (close)
Paris - CAC 40: UP 0.3 percent at 5,067.93 (close)
EURO STOXX 50: UP 0.5 percent at 3,332.26 (close)
Tokyo - Nikkei 225: DOWN 0.4 percent at 23,454.89 (close)
Hong Kong - Hang Seng: UP 0.4 percent at 24,732.76 (close)
Shanghai - Composite: UP 0.5 percent at 3,295.68 (close)
Euro/dollar: DOWN at $1.1848 from $1.1884 at 2100 GMT
Pound/dollar: UP at $1.2888 from $1.2886
Euro/pound: DOWN at 91.89 pence from 92.23 pence
Dollar/yen: DOWN at 105.45 yen from 105.78 yen
West Texas Intermediate: UP 1.0 percent at $38.28 per barrel
Brent North Sea crude: UP 2.3 percent at $40.63 per barrel