The S&P 500, Dow industrials and Nasdaq marked record closing highs in the United States, tracking strong performances by major European stock indexes as the tech sector gave a boost in both regions.
MSCI's world stocks index <.MIWD00000PUS> marked its longest winning streak since October 2015. The global index gained 0.46 percent, setting a record high for a fifth straight session.
“In the U.S., the earnings season seems to be surprising a little bit on the upside," said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland.
"What we have seen recently in the economic reports suggests it should be even better overseas. ... So we have come to the point where things look pretty good in the U.S. and it looks even better in prospect overseas, so what’s not to like about equities," he said.
The Dow Jones Industrial Average <.DJI> rose 66.02 points, or 0.31 percent, to 21,640.75, the S&P 500 <.SPX> gained 13.22 points, or 0.54 percent, to 2,473.83, and the Nasdaq Composite <.IXIC> added 40.74 points, or 0.64 percent, to 6,385.04.
The S&P 500 technology sector <.SPLRCT> recorded its first closing record high since March 2000, which was at the height of the tech bubble.
Morgan Stanley (>> Morgan Stanley) shares climbed 3.3 percent after the bank's profit report.
Vertex Pharmaceuticals Inc (>> Vertex Pharmaceuticals) soared 20.8 percent after the company reported stunning data on its cystic fibrosis treatments.
Not all was rosy in earnings season, as IBM (>> International Business Machines Corporation) shares dropped 4.2 percent after its report, holding back the Dow's gains.
About a week into the heart of second-quarter reporting season, S&P 500 earnings are now expected to rise 8.7 percent, up from an expectation of an 8 percent rise from the start of July, according to Thomson Reuters I/B/E/S.
"Coming off a first quarter which was the strongest in terms of corporate earnings growth since 2011, this market needs to see a continuation of that trend to support these valuations," said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana. "And I think, so far so good."
Shares of U.S. steel makers rallied after a rocky start to U.S.-China economic talks raised expectations that President Donald Trump would impose tariffs on steel imports.
In Europe, the pan-European FTSEurofirst 300 index <.FTEU3> rose 0.71 percent. Dutch semiconductor equipment maker ASML's (>> ASML) shares gained 5.8 pct after the company's quarterly report, helping the region's tech sector <.SX8P> score its biggest daily percentage gain since September.
The dollar edged higher against a basket of currencies a day after the greenback declined sharply after a fresh setback to President Donald Trump's domestic agenda.
The dollar index <.DXY> rose 0.21 percent, with the euro <EUR=> down 0.33 percent to $1.1514.
But the greenback hit a more than three-week low against the yen as traders awaited meetings of the European Central Bank and the Bank of Japan. Market watchers will be looking to see if the recent strength of the euro and the yen influence the central banks' policy outlooks.
"FX investors had a very substantial long dollar/yen position," said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York. "I think they’re just squaring up ahead of the BoJ," he said.
The Bank of Japan began a two-day policy meeting on Wednesday.
U.S. Treasury yields were little changed on light trading volume with benchmark yields hitting their lowest levels in nearly three weeks in advance of Thursday's ECB meeting.
Benchmark 10-year notes <US10YT=RR> last fell 2/32 in price to yield 2.2678 percent, from 2.263 percent late on Tuesday.
Oil prices jumped after a U.S. report showed a bigger weekly draw than forecast in crude and gasoline stocks along with a surprise drop in distillate inventories.
U.S. crude <CLcv1> rose 1.51 percent to $47.10 per barrel and Brent <LCOcv1> was last at $49.69, up 1.74 percent on the day.
(Additional reporting by Sam Forgione in New York and John Geddie in London; Editing by Chizu Nomiyama and Leslie Adler)
By Lewis Krauskopf