Better-than-expected earnings such as from 3M and Siemens as well as a rebound in oil prices helped bolster equities on both sides of the Atlantic overnight.
Oil prices surged amid optimism about the potential for a deal to reduce the global glut. Iraq's oil minister said Saudi Arabia and Russia-the world's top oil producers-are now more flexible about co-operating to curb output.
"This flexibility should be finalised, and we should hear some solid suggestions coming from all parties," Abdul Mahdi told reporters at a conference in Kuwait City, according to Bloomberg.
Brent crude rose more than 5 percent to US$32.13 a barrel.
"The need for a reduction in output is clear - as it has been to us for the past 18 months - but it remains uncertain whether Saudi Arabia and its allies within OPEC are ready to return to the bargaining table," Tim Evans, energy futures specialist at Citi Futures wrote in a note, according to Reuters.
Meanwhile, investors are on tenterhooks for the end of a regular two-day meeting of US Federal Reserve policy makers on Wednesday, waiting for any fresh clues about the path of interest rate increases this year.
For now, better-than-expected corporate earnings including from 3M, Johnson & Johnson, and Procter & Gamble also added to the positive sentiment on Wall Street.
In 13.06pm trading in New York, the Dow Jones Industrial Average climbed 1.7 percent, while the Nasdaq Composite Index gained 1.1 percent. In 12.51pm trading, the Standard & Poor's 500 Index rose 1.4 percent.
The Dow rose, led by rallies in shares of 3M and those of Chevron, last up 4.5 percent and 4 percent respectively. All 30 members of the Dow last traded higher.
"We're starting to get earnings that aren't disastrous, so concern that what was going on overseas would roll into US earnings is waning," Bill Schultz, chief investment officer at McQueen, Ball & Associates in Bethlehem, Pennsylvania, told Bloomberg.
"We're seeing oil put in a bottom here, which helps. The Fed is probably on hold for a while. All of those things are contributing to a slowdown in the outright selling that's taken place this year."
Apple is set to report its latest earnings after the market closes. Its shares last traded 0.7 percent higher.
Even with tepid iPhone sales, the company is expected to post a record profit and revenue in the first quarter, of US$18.14 billion and US$76.59 billion respectively, according to Reuters.
In Europe, the Stoxx 600 Index ended the day with a 0.9 percent increase from the previous close. The UK's FTSE 100 Index added 0.6 percent, Germany's DAX Index rose 0.9 percent, while France's CAC 40 Index advanced 1.1 percent.
Shares of Siemens soared 8.6 percent after the company offered a surprise upgrade of its full-year profit outlook.