Stocks rallied on Tuesday as investors looked past US President Donald Trump's protectionist rhetoric and focused on encouraging economic data and quarterly earnings reports.
The US dollar firmed against the yen and euro after losses in the wake of Trump's inaugural speech promising more trade protectionism, while US Treasury yields recovered from Monday's slide.
MSCI's world index, which tracks shares in 46 countries, was up 0.53 per cent, helped by signs of a revival of economic activity around the world.
Japanese manufacturing showed the fastest expansion in almost three years and a 5-1/2-year peak in French business activity provided the latest proof of a nascent euro zone recovery.
US stocks recovered strongly after Monday's dip and the S&P 500 and Nasdaq set record highs in a broad rally led by gains in financial and technology stocks.
The advance comes as investors assess quarterly earnings reports while seeking clarity on Trump's economic policies.
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Trump signed executive orders on Tuesday to move forward with construction of the controversial Keystone XL and Dakota Access oil pipelines, rolling back Obama administration environmental actions in favour of expanding energy infrastructure.
He also met with chief executives of the Big Three US automakers to push for more cars to be built in the United States.
"He is coming out of the gate strong and he is doing a lot of the things he said he would," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.
"On top of that, earnings aren't a disaster so far, so why not - you've been stuck in a range and why not lift off to the next level?"
The Dow Jones Industrial Average rose 112.86 points, or 0.57 per cent, to close at 19,912.71, the S&P 500 gained 14.87 points, or 0.66 per cent, to 2,280.07 and the Nasdaq Composite added 48.01 points, or 0.86 per cent, to 5,600.96.
IBM, up 2.8 per cent, and Intel, up 2.3 per cent, were among the top boosts to the S&P 500.
Yahoo rose 3.5 per cent after the company reported better-than-expected quarterly profit and revenue and said the sale of its core internet business to Verizon should be completed in the second quarter.
European earnings season got off to a rocky start with profit warnings from BT Group and Aryzta sending their shares sharply lower, but the weakness was offset by gains in Italian financials and mining stocks.
Europe's broad FTSEurofirst 300 index closed up 0.27 per cent at 1,429.32.
The US dollar rebounded against the yen and euro, paring recent losses related to the change in US leadership, as bargain hunters stepped in and bought back the currency still viewed as having the best economic outlook in the developed world.
The dollar index, which measures the greenback against six major rivals, was up 0.12 to 100.28.
The stronger dollar weighed on gold prices, which slipped from a two-month peak. Spot gold was down 0.68 per cent to $1,209.11 an ounce.
US Treasury debt yields rose as investors snapped up equities on the improved outlook for corporate profits, trimming their safe-haven demand for bonds spurred by Trump's protectionist trade stance.
The US 10-year note was down 16/32 in price to yield 2.460 per cent, up from a yield of 2.401 per cent late on Monday.
Oil prices climbed ahead of weekly US inventory data on evidence the global market is tightening as lower production by the Opec and other exporters drain stocks.
Brent crude settled up 21 cents, or 0.38 per cent, at $55.44 a barrel, and US crude settled up 43 cents, or 0.82 per cent, at $53.18.