Stocks mostly rose and the dollar retreated Wednesday on hopes for further US interest rate cuts and a solid set of company earnings.
Gold surged to a new high above $4,200 an ounce, boosted also by a fresh flare-up in China-US tensions.
The dollar was weighed down by warnings on Tuesday from Federal Reserve boss Jerome Powell on risks to the US labor market, reinforcing expectations the central bank will cut rates at its October meeting.
"There was nothing in yesterday's speech to kind of dissuade the market from thinking those rate cuts are coming, and so that was deemed a positive component," said Briefing.com analyst Patrick O'Hare.
Wall Street stocks spent most of the day in positive territory with both the S&P 500 and Nasdaq ending up. The Dow retreated modestly.
Both Bank of America and Morgan Stanley rose decisively following good earnings reports.
On Wednesday, the Fed's "Beige Book" survey of conditions around the United States also pointed to job market deterioration, with most districts reporting a greater number of firms lowering employment.
Paris surged more than two percent after the world's biggest luxury group LVMH beat earnings expectations, triggering a rally across the sector.
LVMH shares soared more than 12 percent, while shares in Hermes jumped 7.2 percent and Gucci-owner Kering rose 5.4 percent.
Shares in Burberry climbed over three percent in London.
"Luxury goods demand has been in something of a tailspin of late, but LVMH has reported signs of easing pressures," said Steve Clayton, head of equity funds at Hargreaves Lansdown.
Investors also hoped for an end to France's political turmoil after Prime Minister Sebastien Lecornu backed the suspension of an unpopular 2023 pensions overhaul to bolster his cabinet's survival.
Frankfurt and London both finished the day in the red.
Sentiment in the tech sector was lifted by Dutch tech giant ASML reporting solid sales and orders on its semiconductor machines.
Its shares climbed 3.4 percent in Amsterdam even as it warned of a steep fall in its China business next year.
Asian markets rallied, with Seoul jumping 2.7 percent while Hong Kong, Shanghai, Tokyo all closed more than one percent higher.
The gains came despite data showing that Chinese consumer prices fell in September, a sign that the world's second-largest economy still faces weak consumer activity.
Investors also tracked the latest trade salvos between Washington and Beijing, with US President Donald Trump last week threatening 100-percent tariffs in retaliation to China's new export controls on rare earths.
China appeared to stoke the row Tuesday by imposing sanctions on five American subsidiaries of South Korean shipbuilder Hanwha Ocean, accusing them of supporting Washington's investigation into the shipping industry.
Trump later threatened to stop purchases of Chinese cooking oil in retaliation for Beijing's halt of US soybeans.
"The rebound in risk appetite has continued across the board today, shrugging off any further spat between the US and China, this time over cooking oil," said Chris Beauchamp, chief market analyst at trading platform IG.
US Treasury Secretary Scott Bessent added to the tensions on Wednesday by slamming Beijing's rare earth export curbs as "China versus the world," and vowing that Washington and its allies would "neither be commanded nor controlled."
- Key figures at around 2020 GMT -
New York - Dow: DOWN less than 0.1 percent at 46,253.31 (close)
New York - S&P 500: UP 0.4 percent at 6,671.06 (close)
New York - Nasdaq Composite: UP 0.7 percent at 22,670.08 (close)
London - FTSE 100: DOWN 0.3 percent at 9,424.75 (close)
Paris - CAC 40: UP 2.0 percent at 8,077.00 (close)
Frankfurt - DAX: DOWN 0.2 percent at 24,181.37 (close)
Tokyo - Nikkei 225: UP 1.8 percent at 47,672.67 (close)
Hong Kong - Hang Seng Index: UP 1.8 percent at 25,910.60 (close)
Shanghai - Composite: UP 1.2 percent at 3,912.21 (close)
Euro/dollar: UP $1.1645 from $1.1607 on Tuesday
Pound/dollar: UP at $1.3400 from $1.3320
Dollar/yen: DOWN at 151.24 yen from 151.84 yen
Euro/pound: DOWN at 86.90 percent from 87.14 pence
Brent North Sea Crude: DOWN 0.8 percent at $61.91 per barrel
West Texas Intermediate: DOWN 0.7 percent at $58.27 per barrel
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