European stocks advanced on Tuesday after European Union leaders reached a deal on a 750 billion euro ($862 billion) recovery fund to help the region recover from the coronavirus crisis.
The pan-European Stoxx 600 closed 0.3% higher provisionally, paring back gains somewhat from earlier in the session. Most sectors and major bourses were in positive territory by the market close.
EU heads of state had been locked in talks since Friday morning to discuss the proposed recovery fund and the EU's next budget, but there had been deep divisions over the size and composition of the fund. Early Tuesday morning, however, the leaders reached a breakthrough agreement.
European Council President Charles Michel said he believes this deal will be seen as a "pivotal moment" for Europe. "We did it! Europe is strong. Europe is united," he said in an early Tuesday press conference announcing the agreement. "These were, of course, difficult negotiations in very difficult times for all Europeans."
On Wall Street, stocks were mostly higher on the back of strong earnings. Traders also looked for more clues on fiscal stimulus. House Minority Leader Kevin McCarthy told CNBC Tuesday that he doesn't expect a coronavirus relief bill to pass before the end of the month.
Positive news in the hunt for a coronavirus vaccine also buoyed market sentiment again Tuesday. Pfizer and BioNTech reported early positive data on a joint coronavirus vaccine Monday and another candidate from Oxford University and AstraZeneca also showed a positive immune response in an early trial. Covid-19 has now infected more than 14.6 million people worldwide and killed over 608,000.
Major corporate earnings came thick and fast Tuesday morning, with UBS announcing a net profit of $1.23 billion for the second quarter of 2020, down 11% from the same period last year ($1.4 billion). Analysts polled by the Swiss lender had expected a net profit of $973 million.
Swiss drugmaker Novartis cut its 2020 sales outlook after reporting a fall in second-quarter profit and sales, with net income dropping 4% to $1.9 billion from $2.1 billion during the same period in 2019.
Swedish automaker Volvo swung to a first-half operating loss but said it expects businesses to recover as countries emerge from lockdown measures, having seen a strong rebound in China since the economy reopened.
At the bottom of the European blue chip index, shares of sports betting group GVC plunged almost 12% after British tax authorities announced a probe into the company's former Turkish gambling unit.