NEW YORK - Global equity markets hit their highest in a month on Tuesday, as stellar results from Google parent Alphabet underpinned tech stocks and China promised fiscal action to support the world's second-largest economy.
MSCI's index of stock markets around the world gained 0.86 percent after Wall Street opened higher.
Alphabet Inc, part of the so-called FAANG group of popular tech stocks that have led the U.S. market's near-decade bull run, jumped 4.8 percent to a record high after a better-than-expected quarterly revenue jump.
Metals prices surged thanks to stimulus signals in Beijing, while global bonds were still volatile following speculation that the Bank of Japan (BoJ) may soon trim its massive stimulus. Clawing its way back from prices near one-year lows, copper rose 2.7 percent to $6,296.50 a tonne.
China's offshore yuan, meanwhile, hit a one-year low and Beijing's government bond yields jumped after the cabinet said it would pursue a more vigorous fiscal policy and as traders bet on further easing in monetary conditions. Shanghai blue chips closed up 1.5 percent at a one-month high.
The offshore yuan fell nearly 0.6 percent to a low of 6.8448 per dollar, its weakest since June 2017, before rebounding. The People's Bank of China (PBOC) had set conversion rates at their weakest in a year.
The moves suggested the possibility that currencies may be weaponized in a flaring U.S.-China trade conflict.
"The big story is that the Chinese currency continues to slide," said Societe Generale FX strategist Alvin Tan.
"It is clear the government is moving towards policies that are supporting growth," he adding, saying the trend was likely to bring a reaction from the United States in time.
The focus in the U.S. remained the banner corporate earnings season, which is in its busiest week, with 39 percent of benchmark S&P 500 index companies reporting, according to Bank of America Corp.
To date, 83 percent of the 110 S&P 500 companies that have posted results have beaten profit estimates, according to Thomson Reuters I/B/E/S.
The Dow Jones Industrial Average rose 207.89 points, or 0.83 percent, to 25,252.18, the S&P 500 gained 22.74 points, or 0.81 percent, to 2,829.72 and the Nasdaq Composite added 76.93 points, or 0.98 percent, to 7,918.80. [.N]
Bonds remained also in the spotlight after ten-year U.S. Treasury yields charged to a one-month high above 2.97 percent. The benchmark notes last rose a bit in price to yield 2.9634 percent.
Bond bulls had been smarting from speculation that the BoJ is close to scaling back its monetary stimulus, a risk that lifted long-term borrowing costs globally.
Markets were worried that Japanese investors would have less incentive to hunt offshore for yield, said ANZ economist Felicity Emmett.
"The 10-basis-point steepening in the Japanese yield curve is massive in the context of a market that rarely moves more than 1 basis point," she said.
"It reflects a broader fear that central banks are reducing their purchases while U.S. bond supply is set to rise significantly."
Part of the shift in yields was caused by talk that data on second-quarter U.S. economic growth, due on Friday, would top current forecasts of 4.1 percent.
A bullish economic mood along with ongoing U.S.-Iran tensions appeared to keep demand strong for oil. U.S. crude rose 1.2 percent to $68.73 per barrel and Brent was last at $73.64, up 0.8 percent on the day.