Global stock markets climbed on Tuesday as equities rallied while the dollar was down for a third straight day as the door was opened for the European Central Bank to enact a bigger rate hike than expected this week.

Stocks on Wall Street advanced in broad rally, joining their European counterparts, with each of the 11 major S&P sectors climbing as the US corporate earnings season heats up.

The S&P 500 was 1.9% higher in midday trading after a powerful tide carried more than 95% of the stocks in the index upward. The Dow Jones Industrial Average was up 500 points, or 1.6%, at 31,572, as of a little past noon Eastern time, and the Nasdaq composite jumped 2.3%.

Stocks have dropped close to 20% this year on worries about rising interest rates and high inflation, which puts an even brighter spotlight than usual on how much profit companies are making. If earnings hold up, it would provide a major support for markets. But if CEOs warn about troubles ahead, another tumble may be on the way.

More types of companies are reporting how much they earned during the spring, broadening out from the banks that dominated the earliest part of the reporting season.

Toy company Hasbro rose 1.8% after it reported stronger profit than analysts expected. Oilfield services provider Halliburton rose 1.2% after its profit and revenue topped forecasts. Netflix climbed 3.3% ahead of its profit report, which will arrive after trading ends for the day. IBM, though, fell 6.3% even though it reported stronger revenue and earnings than expected. The company’s profit margins fell short of some analysts’ expectations, and concerns are rising about the effect of the dollar’s recent strength against other currencies. While a stronger dollar helps limit inflation at home, it can also undercut the value of sales made abroad by U.S. companies.

Health care giant Johnson & Johnson swung from gains to losses after it reported stronger profit than expected but also lowered its revenue forecast for the year. It was most recently down 0.8%.

The dollar’s value eased a bit against other currencies, which allayed some fears for the market. So too, counterintuitively, may have a report that showed an extreme level of pessimism among investors.

Expectations for economic growth and profits have plunged, according to the latest results from Bank of America’s monthly survey of global fund managers. That has them sitting on their highest cash levels since 2001 and their lowest allocations to stocks since 2008.

“Full capitulation” is how Michael Hartnett, chief investment strategist, called it in a a BofA Global Research report. Contrarian investors see such dire levels of pessimism as an encouraging signal, which could presage better times ahead if everyone who was going to sell has already.

Given all those fears, though, big swings have become routine on Wall Street recently. The S&P 500 has been flip-flopping between weekly gains and losses over the last month, after a rough run where it dropped in 10 of 11 weeks. The swings have even hit hour to hour, with early morning gains quickly evaporating by the afternoon. On Monday, an early 1% gain gave way to a 0.8% loss.

Stock markets overseas were mixed Tuesday. Japan’s Nikkei 225 rose 0.6% after reopening following Monday’s national holiday, while Hong Kong’s Hang Seng fell 0.9%. Indexes across much of Europe rallied.

On Thursday, the European Central Bank is expected to raise interest rates for the first time in 11 years in hopes of knocking down high inflation.

The Federal Reserve has already raised rates three times this year, and by increasing amounts each time. It will announce its next increase next week, and the only question among investors is whether it will go with another increase of 0.75 percentage points or a colossal hike of a full point.

The yield on the two-year Treasury, which tends to track expectations for Fed action, rose to 3.20% from 3.17% late Monday. The 10-year yield rose to 3.00% from 2.96%.

In energy trading, benchmark US crude rose 0.5% to $99.95 after falling earlier in the day. Brent crude, the international standard, added 0.1%to $106.36.

Oil prices were little changed on Tuesday as the market balances fears that an economic slowdown will hit oil demand against tight supply and a weaker US dollar. Brent futures for September delivery fell 14 cents, or 0.1%, to $106.13 a barrel by 10:48 a.m. EDT (1448 GMT), while U.S. West Texas Intermediate (WTI) crude for August fell 27 cents, or 0.3%, to $102.33.

The August WTI contract expires on Wednesday. The more actively traded September contract was down 38 cents to $99.04 a barrel.

On Monday, both front-month contracts rose by over 5% in the biggest daily percentage gain for Brent since mid-April and WTI since mid-May.

Oil prices have whipsawed between concerns over supply as Western sanctions on Russian crude and products over the Ukraine war disrupt trade flows, and worries that central bank efforts to tame inflation may trigger a demand-destroying recession.

China stocks closed lower, with foreign investors dumping the most shares in more than a month, as rising COVID-19 cases and fresh property woes clouded the prospect of an economic recovery.

New U.S. home-building activity fell to a nine-month low in June.

Agencies