World shares rose on Wednesday led by coronavirus vaccine hopes though sentiment was cautious as China-US tension rose, while the euro rose to a four-month high ahead of a crucial EU summit.

Wall Street gained on Wednesday with the S&P 500 nearing its highest in more than four months following a strong quarterly showing by Goldman Sachs and promising early data for a potential COVID-19 vaccine.

The US lender jumped 2.9% as its trading revenue doubled in the second quarter, driven by big swings in stock and bond markets since March.

Morgan Stanley gained 2.0% and Bank of America 1.9% ahead of their results on Thursday, which would wrap up earnings from the big six U.S. banks. The broader banking index climbed 2.7%.

At 9:38 a.m. ET, the Dow Jones Industrial Average was up 264.92 points, or 0.99%, at 26,907.51, the S&P 500 was up 25.78 points, or 0.81%, at 3,223.30, and the Nasdaq Composite was up 49.05 points, or 0.47%, at 10,537.62.

The signal for European markets was strong with futures for eurostoxx 50 up 1.3 percent while those for Germany’s DAX added 1.3 percent and futures for London’s FTSE climbed 1 percent.

MSCI’s broadest index of Asia-Pacific shares outside Japan was last up 0.8 percent, not far from a recent five-month peak.

The Chinese mainland shares sold off, with the blue-chip CSI300 index flat and Shanghani’s SSEC off 0.3 percent. Hong Kong’s Hang Seng index ticked up after spending most of the day in the red.

Japan’s Nikkei and Australia’s benchmark index remained upbeat though, and were up 1.6 percent and 1.9 percent, respectively.

E-mini futures for the S&P 500 gave back some of their gains but were still up 0.8 percent.

Overnight risk appetite was boosted by Moderna Inc’s experimental vaccine for COVID-19 which showed it was safe and provoked immune responses in all 45 healthy volunteers in an early-stage study.

On Tuesday, the Dow Jones Industrial Average rose over 2 percent, while the S&P 500 gained 1.34 percent and the Nasdaq Composite climbed 0.94 percent. 

Stocks firmed despite rising Sino-US tensions and three US states reporting new record daily deaths from the pandemic.

“Markets have traded sideways for over a month as bulls and bears move their bishops and horses out on the chess board and then hoard them back in when the other side makes a move. The net result has been a prolonged stalemate,” said Perpetual analyst Matthew Sherwood.

“Forward-looking assumptions about COVID-19 treatments and vaccine offset what is happening today in terms of rising case numbers and an unwinding or stalling of re-opening plans.”

The dollar was on the defensive, particularly against risk-sensitive currencies, following news of progress in vaccine development.

The euro went as high as US$1.1423, its strongest since March 10 and not far off its peak so far this year of US$1.1495. It was last at US$1.1395.

The single currency has been helped by hopes the European Union could agree at its summit later this week on a rescue financing package that will limit the economic damage to the bloc from the pandemic.

The yen was little moved at 107.21 per dollar, off a two-week high of 106.635. The Bank of Japan kept monetary policy steady as expected, though it warned that uncertainty over the economic outlook was “extremely high” due to various risks, including rising coronavirus infections in the capital Tokyo.

The risk-sensitive Australian dollar, too, pared gains to be last up 0.2 percent at US$0.6990.

There were signs of wariness among investors, as yields on leading US and euro zone government debt fell and safe-haven gold prices solidified gains above US$1,800 an ounce.

Spot gold rose to US$1,809 an ounce.

Oil prices rose on Wednesday after a sharp drop in US crude inventories. Brent crude futures were up 24 cents at US$43.14 a barrel, and US crude futures rose 22 cents to US$40.50 a barrel.