In midday trading, London's FTSE 100 rose 0.6% to 7,562 after Boris Johnson was named as the new prime minister, a move that could increase the risks of a disorderly Brexit. Frankfurt's DAX soared 1.5% to 12,470 and France's CAC-40 jumped 0.7% to 5,605.
On Wall Street, futures for the benchmark Dow Jones Industrial Average rose 0.4% to 27,280, while futures for the Standard & Poor's 500 index gained 0.3% to 2,998. Traders have focused on signs of movement toward a settlement of the U.S.-China tariff war over Beijing's technology ambitions.
They were reassured by an agreement in June by Presidents Donald Trump and Xi Jinping to resume stalled talks. That is despite warnings the truce is fragile because the two sides are divided by the same array of disagreements that caused negotiations to collapse in May.
Investors also were looking ahead to meetings by the European Central Bank this week and the U.S. Federal Reserve next week. "Reports of the U.S. and China resuming trade negotiations next week are positive for risk sentiment, but escalating tensions in the Middle East pushing oil higher are negative," said analysts at ING in a report. "We anticipate wait and watch sentiment" ahead of the central bank meetings.
In Asia, the Shanghai Composite Index gained 0.5 to 2,899.94 and Tokyo's Nikkei 225 climbed 1 % to 21,620.88. Hong Kong's Hang Seng advanced 0.3% to 28,465.65. Seoul's Kospi was 0.4% higher at 2,011.45. India's Sensex gained 0.4% to 38,191.44.
Sydney's S&P-ASX 200 gained 0.5% to 6,724.60. New Zealand and Taiwan climbed while Southeast Asian markets were mixed. Earnings reports are due over the next two weeks from about three-fifths of S&P 500 companies. Expectations are generally modest.
Slowing global economic growth and rising costs are weighing on companies. Many investors are more interested in what CEOs say about how Trump's trade war will affect profits than in their results for the spring.
Markets also are watching tensions over Iran's nuclear program. Washington announced sanctions this week on a Chinese oil company, Zhuhai Zhenrong, that it said violated controls on transporting Iranian crude. Beijing has said it supports nuclear nonproliferation efforts but rejects unilateral U.S. sanctions.
"This simultaneously turns U.S. pressure up on Iran and also stresses the already strained U.S.-China relations," Mizuho Bank said in a report. ENERGY: Benchmark U.S. crude shed 34 cents to $55.88 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 46 cents on Monday to close at $56.22. Brent crude, used to price international oils, lost 50 cents to $62.76 in London. It gained 79 cents the previous session to $63.26.
CURRENCY: The dollar gained to 108.14 yen from Monday's 107.86 yen. The euro fell to $1.1180 from $1.1209.