By Chris Prentice and Samuel Indyk
NEW YORK/LONDON (Reuters) – European shares hit a record high on Wednesday, supported by a draft U.S.-Ukraine deal on critical minerals and robust corporate earnings.
Global shares also gained and Treasury yields nudged higher after the previous day’s sharp fall, while the U.S. dollar rose after House Republicans advanced U.S. President Donald Trump’s tax cut plans.
U.S. copper prices surged after Trump ordered a probe into copper imports.
Wall Street was up ahead of hotly-anticipated earnings from AI chipmaker Nvidia .
The Republican-controlled U.S. House of Representatives late on Tuesday narrowly passed Trump’s $4.5 trillion tax-cut plan, sending the budget resolution to the Senate, where Republicans are expected to take it up.
“It’s mainly good for corporate U.S.,” said Lars Skovgaard, senior investment strategist at Danske Bank.
“There’s expected to be less regulation and tax cuts. I would expect it to happen and then it will be positive for markets if they do so.”
Sentiment also improved after reports that the U.S. and Ukraine agreed terms of a draft minerals deal.
European shares advanced for a second day, with the pan-continental STOXX 600 touching a new record and blue-chip indexes in Frankfurt, Paris and London also rising.
“(The plan) moved through just a little bit quicker than people were expecting,” said Tony Sycamore, a market analyst at IG.
On Wall Street, the Dow Jones Industrial Average rose 211.70 points, or 0.49%, to 43,834.33, the S&P 500 rose 41.19 points, or 0.70%, to 5,996.73 and the Nasdaq Composite rose 176.96 points, or 0.94%, to 19,204.88.
Emerging market stocks rose 13.04 points, or 1.16%.
U.S. Treasury yields rose slightly as investors anticipate more debt issuance ahead, with the benchmark 10-year yield up 0.4 basis points to 4.302.
The two-year yield, which is sensitive to changes in Federal Reserve rate expectations, rose 2.7 basis points to 4.123%
Yields had fallen to their lowest in months in the previous session as traders ramped up bets of more Fed rate cuts this year on growing concerns over the outlook for the world’s largest economy. [US/]
Data on Tuesday showed U.S. consumer confidence deteriorated at its sharpest pace in 3-1/2 years in February – the latest in a string of surveys suggesting that businesses and consumers were becoming increasingly rattled by the Trump administration’s policies.
Fed funds futures now point to 55 bps of easing priced in by year-end, implying at least two quarter-point cuts, up from about 40 bps a week ago.
Meanwhile, U.S. copper prices were up 3.5% on rising expectations of Trump tariffs and a massive power outage in major producer Chile. [MET/L]
The dollar index, which measures the currency against six other majors, was up 0.2%.
The euro was down 0.18% at $1.0494.
In commodities, oil prices held near two-month lows. Brent crude oil futures were down 0.08% to $72.96 a barrel, while U.S. West Texas Intermediate (WTI) crude edged up 0.02% to $68.98 per barrel.
Spot gold eased 0.16% after dropping 2% the previous session. [GOL/]
Artificial intelligence poster child Nvidia reports its quarterly earnings later on Wednesday, which could offer clarity on demand and justify the sector’s lofty valuations.
Investor scepticism has grown over the billions that U.S. tech firms have channelled into AI infrastructure due to slow payoffs and breakthroughs at China’s DeepSeek.
“Any signs of weakness in Nvidia’s report could have outsized effects on investor sentiment towards AI stocks as a whole,” said Saxo’s global head of investment strategy Jacob Falkencrone.
Some of Europe’s most popular AI-linked stocks tumbled this week after an analyst note flagged a possible slowdown by Microsoft on data centre leasing, knocking sentiment in the sector.
(Reporting by Chris Prentice in New York and Samuel Indyk and Rae Wee in London; Editing by Christina Fincher, Kirsten Donovan and Sharon Singleton)
