World markets have hit new peaks, pushed higher by continuing optimism about the outcome of the French presidential election, a series of positive US company results and growing anticipation over Donald Trump’s promised tax reforms.

The biggest gains on Tuesday came from the US, with the technology-heavy Nasdaq Composite breaking the 6,000 barrier for the first time, 17 years after it first reached 5,000 during the height of the dotcom boom. The index was boosted by technology giants such as Amazon, Apple, Microsoft, Google and Facebook, which will be among the main beneficiaries of any Trump tax reforms.

The president’s long-awaited announcement is now expected on Wednesday, with suggestions of a cut in corporation tax from 35% to 15% and possible reductions in income tax rates, particularly for middle-income earners.

Stock markets surge after French election result Read more

The Dow Jones industrial average also moved sharply higher, passing the 21,000 mark for the first time since the middle of March. By Tuesday lunchtime it was up 1.2% at 21,012.

US markets were also supported by better-than-expected results from a number of major companies, including construction equipment group Caterpillar, which is also likely to benefit from Trump’s promised infrastructure spending, and burger chain McDonald’s.

For the moment, markets are shrugging off any concerns about the administration failing to agree a budget plan, which risks a government shutdown by the weekend if no agreement can be reached.

Elsewhere Emmanuel Macron’s first-round French election victory had sent shares surging on Monday, and the prospect of him defeating far-right rival Marine Le Pen in the second round in a fortnight continued to provide some support.

Asian shares set the tone overnight with the Nikkei 225 closing just over 1% higher. But with analysts saying a shock victory for Le Pen could not be completely discounted, and growing concerns about Macron’s ability to effect change if he does win, the gains in Europe were more muted.

Kathleen Brooks of City Index said: “Equity markets are putting a lot of faith into Macron. He first has to win the second round of the French presidential election and get the keys to the Élysée Palace, but then his newly formed party has to do well in the national assembly elections in June.”

There was also some nervousness ahead of the latest European Central Bank meeting on Thursday, with recent positive economic data from the eurozone prompting analysts to wonder if the bank would begin to call a halt to its economic stimulus measures.

France’s Cac closed up 0.17% at 5,277, while Germany’s Dax edged up 0.1% at 12,467, albeit it at another closing high. The Stoxx 600, an index of leading companies across Europe, added 0.2%, its highest level since August 2015, helped by news of a €12bn (£10bn) deal for LVMH to take full control of fashion house Christian Dior.

In the UK, the FTSE 100 finished up 10.96 points (0.15%), supported by a further rise in banking shares as investors bet that a Macron victory would avoid Le Pen’s threat of a eurozone breakup and boost the European banking sector.

Meanwhile the MSCI World Index, which measures performance across 23 developed country equity markets, hit a record high for the second day running.

Joshua Mahony, a market analyst at IG, said: “US markets are leading the way higher, as the excitement over Donald Trump’s corporate tax cuts takes the mantle from the French elections ... Despite the optimism of Trump’s tax plan, we are seeing the foreign exchange trends [from Monday] come back into play, with extended gains for the euro ahead of Thursday’s ECB meeting.

“While much of the focus has been upon a rate-raising Fed, the political cloud that is gradually being lifted over the eurozone is likely to start putting pressure on [ECB president Mario] Draghi and co.”



As well as the relief rally over the Macron result, the prospect of an end to the ECB’s bond-buying programme and low interest rate measures saw the euro hit a two-week high against the pound, up 0.39% to €1.1724.

Gold, seen as a haven when investors avoid riskier assets, was out of favour, falling about $15 an ounce to $1,262 (£980).