“It’s incredible,” said Jack Ablin, chief investment officer at BMO Private Bank in Chicago. “Certainly sentiment is pretty strong and it’s widespread, both from the business community and consumers. Any economic concerns are pretty much falling by the wayside.”

In Asia, the main Hang Seng Index in Hong Kong and China’s H-shares index posted their best day in seven weeks, while stocks in Tokyo also rose.

In Europe, Germany’s benchmark DAX index jumped more than 1 per cent before paring gains. MSCI’s emerging markets index rose 1.44 per cent and its gauge of stocks across the globe gained 0.71 per cent.

Corporate earnings and expanding growth have propelled the stock rally while investors shrug off political risk. Wall Street trading volumes were low in a week marked by the US Thanksgiving holiday.

In Europe, Volkswagen was among Germany’s top gainers for a second day, closing up 3.0 per cent, after the carmaker raised its midterm outlook on Monday.

The pan-European FTSEurofirst 300 index closed up 0.45 per cent.

Chip maker Analog Devices Inc’s quarterly profit beat analysts’ estimates on growth in its industrial segment and automotive business, which has seen sharp demand for sensor chips from electric and self-driving vehicles.

Goldman Sachs raised its earnings estimate for the S&P 500 in 2018 and 2019 based on expectations of US corporate tax reform, above-trend global and US growth and slowly rising interest rates from an historically low base.

Investors are not worried about an unwelcome surprise acceleration of US inflation that could rock a Goldilocks scenario where growth supports earnings and central banks are unlikely to act in a heavy-handed fashion, said Larry Hatheway, chief economist at GAM Investment Management in Zurich.

“There isn’t right now in an investor’s mind a compelling alternative to holding stocks,” Hatheway said. “We’ve generally seen stable-to-lower bond yields, so underneath it there does seem to be a very strong faith fundamentally that growth is fine, therefore earnings are fine but inflation is not a risk.”

The gap between French and German borrowing costs narrowed to its tightest since before the 2010-2012 euro zone debt crisis, as confidence in the bloc’s economic prospects swelled.

The spread on 10-year French and German debt tightened to 15 basis points, a level last seen in August 2009, well before several sovereign debt crises rocked the single currency bloc and global markets.

In the United States, the Treasury yield curve flattened to its lowest in a decade as investors awaited minutes from the Federal Reserve’s last meeting, to be released on Wednesday.

Low inflation and global demand for yield has supported longer-dated debt. Benchmark 10-year notes were last up 3/32 in price to yield 2.3595 per cent.

The dollar turned broadly lower, moving in line with declining US 10-year Treasury yields.

The dollar index fell 0.12 per cent, with the euro up 0.05 per cent to US$1.1738. The Japanese yen strengthened 0.16 per cent versus the greenback at 112.46 per dollar.

Oil rose, supported by expectations of an extension next week of output cuts by the Organisation of the Petroleum Exporting Countries, but prices remained under pressure from signs of higher output in the United States.

Brent crude oil rose 35 cents to settle at US$62.57 a barrel. US light crude added 41 cents to settle at US$56.83. US gold futures for December delivery settled up US$6.40 at US$1,281.70 per ounce.