Global stocks mostly rise as US Senate approves infrastucture bill

Crude prices rallied on Tuesday, with some analysts saying the worries over the hit to demand from the Delta variant have been overstated.

Global stocks mostly rose Tuesday along with oil prices and the dollar, as markets cheered US Senate passage of a $1.2 trillion infrastructure package while keeping an eye on latest Covid-19 trends.

In a political victory for President Joe Biden, the upper house of the US Congress approved the sweeping package in a bipartisan vote. The measure now faces a make-or-break vote in the House of Representatives in the coming weeks, where its future is less certain as divisions have sprung up in the Democratic majority.

But investors took bets Tuesday on companies expected to garner a share of the business from the push to upgrade America's roads, bridges and broadband. This includes industrial giant Caterpillar as well as metals producers US Steel and Alcoa.

The Dow and S&P 500 edged to fresh records, but the Nasdaq retreated.

Earlier, equity markets in London, Paris and Frankfurt finished modestly higher.

While vaccinations are being rolled out across the globe, the spread of the highly contagious Delta variant is forcing some governments -- particularly China and Australia -- to impose fresh lockdowns and other containment measures.

That has led some observers to re-evaluate the outlook for growth, weighing on oil prices the last two days.

But crude prices rallied on Tuesday, with some analysts saying the worries over the hit to demand from the Delta variant have been overstated.

Meanwhile, the dollar rose to its highest level against the euro since late March. The gain come on the heels of Friday's strong US jobs report, which was followed by comments from several Federal Reserve officials suggesting the US central bank could soon wind down its massive stimulus program.

Meanwhile, markets are looking ahead to Wednesday's report on the US consumer price index for the latest reading on inflation pressures in the restarting economy, that has been beset by supply and shipping issues.

"Traders are pricing in the potential for an earlier-than-previously-anticipated announcement that the Federal Reserve may start tapering its asset purchases after a run of strong data out of the US," said Matt Weller, analyst at Forex.com.

Against that backdrop, new US inflation data for July "will be closely monitored, with another hot reading raising the odds of an earlier taper announcement, perhaps as soon as September or even later this month," Weller said.

New York - Dow: UP 0.5 percent at 35,264.67 (close)