Global stock markets rose Tuesday as investors grew increasingly confident that the US Federal Reserve will cut interest rates next month.
The gains, helped also by some strong earnings and generally easing concerns about tariffs, followed strong advances on Monday.
The dollar jumped against the euro and yen.
Oil prices retreated after US President Donald Trump renewed his threat to raise tariffs on India over its purchases of Russian crude.
Wall Street was steady at the opening bell, with the Dow flat and the S&P 500 and Nasdaq Composite edging up. However they quickly pushed higher.
“While sentiment towards equity markets continues to remain positive for the time being, that's not to say things will remain rosy in the coming weeks,” said City Index and FOREX.com analyst Fawad Razaqzada, pointing to high stock valuations amid a weakening economy.
Briefing.com analyst Patrick O'Hare said “expectations of lower interest rates in the months ahead” were providing support for equities.
Data released on Friday showing weakness in the US jobs market caused stock markets to slump as they raised concerns that the world's biggest economy is in worse shape than expected.
Stocks rebounded on Monday, however, as those worries fanned bets that the Fed will cut interest rates in September.
According to CME Group's FedWatch tool, investors have priced in two interest rate cuts — in September and October — and see another one as possible in the third and final meeting in December.
Some analysts remained sceptical, however.
“I continue to believe the Fed will not reduce rates at all this year given rising inflation caused by tariffs and a relatively stable unemployment rate,” said Lazard chief market strategist Ronald Temple.
European markets were solidly higher in afternoon trading.
“European markets continue to wave off any concerns around the direction of travel for the US economy and Thursday's looming tariff day,” noted Joshua Mahony, chief market analyst at Rostro trading group.
Trump's fresh tariffs on dozens of US trade partners are set to kick in on August 7, almost one week later than planned.
The European Union on Tuesday announced the suspension of its retaliatory tariffs on US goods worth 93 billion euros ($107 billion) after Brussels struck a deal with Washington last month.
“The commission has today adopted the necessary legal procedures to suspend the implementation of our EU countermeasures, which were due to kick in on August 7,” EU trade spokesman Olof Gill said.
