European stocks look set to open sharply higher on Friday after reports that the United States and China have reached "a deal in principle" to resolve a bruising 17-month trade war.
The two sides are still formulating a written agreement but an "agreement in principle" had been reached, Reuters reported citing a source familiar with the negotiations.
Asian stocks rose, with markets in China, Hong Kong and Japan leading the surge on talks of a U.S.-China trade deal.
The British pound surged as exit polls indicated a resounding election victory for Prime Minister Boris Johnson's Conservative Party.
Oil prices hit their highest level in three months on hopes that a U.S.-China trade deal may help raise global demand for crude.
U.S. stocks rose notably overnight after President Donald Trump said the U.S. is getting close to a "big deal" with China.
Also, a Wall Street Journal report said Washington has offered to slash existing tariffs and cancel new ones set to take effect Sunday as part of a deal to boost Chinese purchases of U.S. farm goods and obtain other concessions.
The Dow Jones Industrial Average gained 0.8 percent, while the tech-heavy Nasdaq rose 0.7 percent and the S&P 500 added 0.9 percent to reach fresh record closing highs.
European markets closed higher on Thursday after the Federal Reserve signaled that rates would remain accommodative with no hikes expected in 2020. The European Central Bank decision and the U.K. election also remained on investors' radar.
The pan European Stoxx 600 advanced 0.3 percent. The German DAX rose 0.6 percent, France's CAC 40 inched up 0.4 percent and the U.K.'s FTSE 100 added 0.8 percent.