There was no doubting the demand for the U.S. tech sector and megacap growth stocks including Nvidia (NVDA.O) , Alphabet (GOOGL.O) and Amazon (AMZN.O). Nasdaq futures rose another 0.5%, while S&P 500 e-minis added 0.4%.
"We have been surprised at just how resilient markets have been in the face of a tremendous amount of uncertainty," Kevin Gardiner, global investment strategist at Rothschild & Co, said.
"Markets continue to look resilient, though we note that we haven't seen equity valuations look more expensive since 2000," he added.
European shares nudged down, though European defence (.SXPARO) stocks led sectoral gains with a rise of just over 1%. The sector has remained buoyant since last week's NATO pledge to spend 3.5% of GDP on core defence and 1.5% on broader defence-related measures, a jump worth hundreds of billions of dollars a year.
Attention also turned to a European Central Bank conference in Sintra, key euro zone inflation reports due this week and the closely-watched U.S. non-farm payrolls report on Thursday.
Asian markets closed on a mixed note with Chinese blue chips (.CSI300) up 0.4%, after surveys showed manufacturing improved slightly in June while service activity picked up. Hong Kong stocks (.HSI) closed down 0.9% while Japan's Nikkei (.N225) rose 0.8%.
DOLLAR DOLDRUMS
A holiday on Friday means U.S. payrolls data will come a day early, with analysts forecasting a rise of 110,000 in June and a rising jobless rate reaching almost a year high at 4.3%.
The resilience of the labour market is a major reason the majority of Federal Reserve members say they can afford to wait on cutting rates until they can gauge the true impact of tariffs on inflation, so a weak report would stoke speculation of a rate cut in July rather than September.
The prospect of policy easing has helped Treasuries weather worries on the ballooning U.S. budget deficit.
Ten-year Treasury yields fell 3 basis points to 4.25% , having fallen 7 bps last week.
The dollar struggled in part over concern that tariffs and policy whipsaws from the White House will drag on economic growth.
The euro rose to $1.1721 , having climbed more than 1% last week to its highest levels since 2021 against a broadly weak dollar.
Sterling held just below a similar peak hit last week, trading just below $1.37 .
The dollar was down 0.4% to 144.13 yen and the dollar index eased 0.2% to 97.201 , a whisker above three-year lows.
The dollar has fallen by more at this stage in the year than in any previous year since the U.S. moved to a free-floating exchange rate in 1973.
"At this point, further weakness could become self-reinforcing as underhedged European/Asian portfolios chase the move," James Reilly, a senior markets economist at Capital Economics, said.
In commodity markets, the general revival in risk sentiment weighed on gold, which rose 0.5% to $3,289 an ounce but held below April's record top of $3,500.
Oil prices continued to struggle on concerns about plans for increased output from OPEC+, which contributed to a 12% slide last week.
Brent rose 0.3% to $68 a barrel, while U.S. crude rose 0.25% to $65.7 per barrel.
Reporting by Nell Mackenzie and Wayne Cole Editing by Shri Navaratnam, Lincoln Feast and Andrew Heavens
Reuters report
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