Sterling rose against both the dollar and euro after United Kingdom inflation hit its highest in five years, adding to the case for the Bank of England to do more to support the pound.
IRMA FEARS: Irma wreaked havoc along the entire Florida peninsula and was still dropping rain and causing power outages and some damage around the Southeast.
All eleven of the S&P 500's main sectors finished in positive territory, with financials and information technology shares leading the rally.
Shares of US and European insurers rose, with companies particularly exposed to Florida posting sharp gains as the losses from Irma were seen as less severe than feared.
Shares of Florida insurers Heritage Insurance Holdings Inc HRTG.N, HCI Group Inc HCI.N and Universal Insurance Holdings Inc UVE.N all rose at least 13 percent or more.
The rose 1.05% and the Kospi in South Korea posted 0.12% gain.
MSCI's all country world stock index .MIWD00000PUS , which tracks more than 2,400 stocks in 47 countries, rose 0.26 percent after it jumped 0.9 percent on Monday, its fourth-biggest gain so far this year.
The relief over North Korea and a weaker yen JPY= helped the Tokyo stock market .N225 to its best session since June.
"We've seen a huge surge in the loonie over the last couple of months", said Fehr, who attributed the upward movement to the Bank of Canada hiking interest rates twice in two months and USA data suggesting the Federal Reserve may not be quite as aggressive with upcoming rate hikes and winding down its balance sheet.
"We are massively stimulating this economy that's already doing pretty well", Paulsen said.
- The Bloomberg Dollar Spot Index gained 0.5 percent for the first advance in more than a week.
The U.S. dollar on Tuesday clung to the previous day's gains, supported by a bounce in Treasury yields and ahead of U.S. inflation data that could influence the timing of the next Federal Reserve interest rate increase.
USA stocks rose to a record, the dollar strengthened and Treasuries tumbled as investors piled into riskier assets after Hurricane Irma wreaked less damage than forecast and North Korea failed to exacerbate tensions.
FILE PHOTO - A USA one-hundred dollar bill (C) and Japanese 10,000 yen notes are spread in Tokyo, in this February 28, 2013 picture illustration.
In Europe, Germany's DAX was up 0.6 percent at 12,550 while the CAC 40 in France was 0.7 percent higher at 5,213.
Oil prices regained a little ground after falling sharply on Friday amid worries that energy demand would be hit hard by Hurricane Irma.
ENERGY: Benchmark U.S. crude rose 16 cents to $48.23 a barrel, while Brent crude, used to price global oils, was up 26 cents to $54.10 a barrel in London. Bullion futures fell 1.2% to $1,335.00 a troy ounce on the Comex division of the New York Mercantile Exchange.