Euro and Asian stocks lower, sterling hits 30-year low over ECB taper talks

Oil prices surged on Wednesday after a report showed a drop in U.S. crude stockpiles, fuelling energy shares and helping lift Wall Street along with encouraging economic data.

In Europe, bond yields jumped while the pan-European STOXX index fell 0.6 percent, with markets rattled by the prospect of the region’s central bank eventually winding down its bond-buying stimulus.

MSCI’s gauge of stocks across the globe climbed 0.3 percent after two sessions of declines.

U.S. services sector activity rebounded to an 11-month high in September, an encouraging sign for economic growth.

“If there had been any concern about some sort of imminent recession anytime soon a lot of this data seems to debunk that thesis,” said Jeff Weniger, senior strategist at BMO Wealth Management in Chicago.

The Dow Jones industrial average rose 126.55 points, or 0.7 percent, to 18,295, the S&P 500 gained 11.89 points, or 0.55 percent, to 2,162.38 and the Nasdaq Composite added 37.40 points, or 0.71 percent, to 5,327.06. The energy sector gained 1.7 percent.

U.S. stocks have been pressured this week by concerns over Britain’s exit from the European Union and expectations of a Federal Reserve interest rate increase in the coming months.

Chicago Fed President Charles Evans said he would be “fine” with raising U.S. interest rates by year-end if U.S. economic data continued to come in firm.

Traders see a 64-percent chance the Fed will hike at its December meeting, according to the CME FedWatch website. Financial shares, which tend to benefit in a rising rate environment, climbed 1.6 percent.

“People are certainly waiting for that inevitable interest rate rise by the Fed, but I think they’re just not sure if that’s a sign that things are better and earnings are likely to improve, or a reason for people to sell stocks because rates are rising,” said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.

Oil prices rose to their highest since June after the fifth unexpected weekly drawdown in U.S. crude inventories.