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Shares of Microsoft rallied amid reports the company is set to announce an iPad-compatible version of its Office software suite later this month, helping to pace broader market gains.
Advances in shares of Microsoft, last up 3.1 percent, led the Dow Jones Industrial Average higher.
Microsoft Chief Executive Satya Nadella is poised to unveil the iPad app at an event on March 27 as part of the new CEO's "mobile first cloud first" strategy, Reuters reported late on Monday, citing a source familiar with the matter.
"We estimate that if 10 percent of the iPad install base were to subscribe to Office then this could add 15 million subscribers and generate US$1.1 billion to US$1.5 billion in consumer Office subscription revenue per year," Bernstein Research analyst Mark Moerdler said in a note, according to Reuters.
In afternoon trading in New York, the Dow added 0.49 percent, the Standard & Poor's 500 Index gained 0.60 percent, while the Nasdaq Composite Index increased 0.97 percent.
Federal Reserve policy makers began their two-day meeting on Tuesday and are expected to announce tomorrow a third US$10 billion reduction in their monthly bond-purchase programme, which would reduce it to US$55 billion. Janet Yellen will lead her first post-Federal Open Market Committee-meeting press conference as Fed chairman on Wednesday.
"Yellen's Fed will be revealed in detail tomorrow," Pimco's Bill Gross wrote on Twitter. "Expect focus on inflation, less focus on employment."
Investors were relieved, for now, that Russian President Vladimir Putin said he would respect the independence of what's left of Ukraine as he signed a treaty annexing Crimea following Sunday's referendum in which voters opted to rejoin Russia.
"The words that market participants wanted to hear were that he'll respect Ukraine's sovereignty and will be satisfied with Crimea, and won't go for more," Benno Galliker, a trader at Luzerner Kantonalbank in Lucerne, Switzerland, told Bloomberg News. "These words were heard, and we're seeing a relief nudge up."
In Europe, the Stoxx 600 Index finished the day 0.6 percent higher than the previous close, as did the UK's FTSE 100. Germany's DAX gained 0.7 percent, while France's CAC 40 rose 1 percent.
Gold dropped as a result as the need for a perceived safe-haven investment diminished. Gold futures for April delivery fell 1.3 percent to US$1,355.40 an ounce.
To be sure, the relief might prove temporary.
Investors "don't know how bad the sanctions are going to be, or if it escalates into a military buildup from the West," Michael Franzese, senior vice president of fixed-income trading at ED&F Man Capital Markets in New York, told Bloomberg News. "That's where the fear is."
A report showed German investor confidence slid for a third month in March, declining more than expected to 46.6, down from 55.7 in February. Germany relies heavily on Russia as an energy supplier.