Equity investors found solace in indications that Europe will safeguard its banking system, as France and Belgium bailed out Dexia SA and a top European official hinted at a possible bank recapitalization plan.
Britain's FTSE 100 gained 2.4 per cent, France CAC 40 surged 3.1 per cent and Germany's DAX leapt 3.6 per cent.
Dow futures rose 69 points, or 0.7 per cent, to 10,752, while S&P 500 futures gained 8.7 points, or 0.8 per cent, rising to 1,122.30.
Dexia's bailout suggests that policymakers have become more aware of the seriousness of the threat of the euro zone debt crisis.
European Economic and Monetary Affairs Commissioner Olli Rehn told the Financial Times on Tuesday that the ministers, who have so far rejected any concerted bank recapitalisation, had a new sense of urgency.
European banks are better capitalised than they were a year ago, but the sovereign debt crisis has had a negative impact on the banking sector, a Commission spokesman said.
Europe needs between €100-billion and €200-billion to recapitalise its banks to win back investor confidence and should carry out the plan across the continent in one sweep, the International Monetary Fund's European Department Director Antonio Borges said on Wednesday.
The euro was down 0.3 per cent at $1.3295 (U.S.).
The Canadian dollar traded at 95.14 U.S. cents.
Copper rose 2 per cent to trade just below $7,000 a tonne, snapping a five-day losing streak.
Gold slipped $4.90 to $1,611 an ounce.
West Texas Intermediate crude traded 3.1 per cent higher at $77.98 a barrel.