Global equity markets rallied on Monday to lift a gauge of world stock indexes to a fresh peak, while the euro briefly jumped to a five-month peak against the U.S. dollar as the first round of an election in France went to the market's preferred contender.
Centrist Emmanuel Macron took a big step towards the French presidency on Sunday by winning the first round of voting and qualifying for a May 7 runoff alongside far-right leader Marine Le Pen.
The victory for the pro-European Union centrist Macron sent MSCI's gauge of stock indexes across the globe to a record high of 453.70.
The blue-chip euro zone STOXX 50 index surged 4 %, its best day in nearly two years, while France's CAC40 jumped 4.1 %, its biggest daily percentage gain in almost five years.
Investors have concerned a victory for Le Pen could put France on the path taken by Britain to leave the European Union.
"This alleviates fears that we were going to have to navigate a French exit of the European Union," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.
"This is a classic relief rally showing up most in financials," he said. "We cleared this hurdle and now it's a little bit more clear running."
The S&P financial sector climbed 2.2 %, its best day in almost two months.
The Dow Jones Industrial Average rose 216.13 points, or 1.05 %, to end at 20,763.89, the S&P 500 gained 25.46 points, or 1.08 %, to 2,374.15 and the Nasdaq Composite added 73.30 points, or 1.24 %, to 5,983.82.
The pan-European FTSEurofirst 300 index rose 2.20 % and MSCI's gauge of stocks across the globe gained 1.56 %.
The euro pared earlier gains but was still up more than 1 % against the dollar and nearly 2 % higher against the yen.
There was also an unwinding of safe-haven trades.
Shorter-term German bonds saw their biggest sell-off since the end of 2015 as investors piled back into French as well as Italian, Spanish, Portuguese and Greek debt.
Benchmark 10-year notes last fell 11/32 in price to yield 2.273 %, from 2.236 % late on Friday.
The Japanese yen weakened 0.6 % versus the greenback at 109.73 per dollar.
The rally gutted expectations for near-term stock market gyrations. Europe's main gauge of equity market anxiety, the Euro STOXX 50 Volatility index, fell the most in nearly seven years, while the U.S.-facing CBOE Volatility Index hit a more than five-week low.
Spot gold dropped 0.6 % to $1,276.10 an ounce. U.S. gold futures fell 0.9 % to $1,277.50 an ounce.
Investors are gearing up for the busiest week for corporate results in at least a decade on Wall Street, with more than 190 S&P 500 companies, including heavyweights Alphabet and Microsoft, due to report.
Asia also saw a risk rally. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.6 % higher, while Japan's Nikkei rose 1.4 %.
Oil prices continued to decline after last week's selloff, on lack of confirmation that OPEC will extend output cuts until the end of 2017 and as Russia indicated it can lift output if the deal on curbs lapses.
U.S. crude settled down 0.79 % at $49.23 per barrel and Brent settled 0.69 % lower at $51.60.