US and European equities climbed Wednesday following upbeat reports on US-China trade talks that offset lackluster US economic data.

Oil prices also rose amid reports the Organization of the Petroleum Exporting Countries was leaning towards a agreement to cut output further to boost oil prices.

"This morning's rebound has gained a little more traction on reports that, despite the heating up of rhetoric over trade, the US and China are moving closer to agreeing a deal on the amount of tariffs that would be rolled back in any phase one trade deal," said CMC Markets analyst Michael Hewson.

Bloomberg quoted people familiar with the talks as saying that US negotiators expected a deal to be finalized before a new round of US tariffs on China are due to hit on December 15.

The report countered the pessimism that has weighed on stocks in recent days and blunted disappointing private-sector hiring data released Wednesday. A report on services sector activity also came in weaker than expected, although the dominant area of the US economy continues to show growth.

"While yesterday, the odds of an imminent trade deal seemed slim in the wake of the president's hawkish words, we got upbeat reports regarding the state of the negotiations overnight," Gorilla Trades strategist Ken Berman wrote in a client note.

New York's S&P 500 index finished with a 0.6 percent gain.

In Europe, Frankfurt added 1.2 percent while Paris climbed 1.3 percent.

London gained 0.4 percent while the pound jumped to its highest level since May 2017 against the euro on news British Prime Minister Boris Johnson's Conservatives were leading in opinion polls ahead of a general election on December 12.

Oil futures benchmarks in New York and London rose sharply amid expectations for more aggressive OPEC action to boost crude prices.

However, analysts cautioned that even such a move by OPEC might not have the intended effect, boosting US shale production.

"As rigs continue to decline, the shale patch is clearly feeling the strain from current rangebound prices, but further OPEC+ cuts could allow a rebound before meaningful production declines ever started," said a note from Robbie Fraser, senior commodity analyst at Schneider Electric

Among individual companies, Google-parent Alphabet climbed two percent as the company announced that co-founder Larry Page was stepping down as chief executive and would be replaced by Google CEO Sundar Pichai.

New York - Dow: UP 0.5 percent at 27,649.78 (close)

Donald Trump said he had 'no deadline' for a trade deal with China and liked the idea of waiting until after next year's presidential elections
Donald Trump said he had 'no deadline' for a trade deal with China and liked the idea of waiting until after next year's presidential elections POOL / Alastair Grant

New York - S&P 500: UP 0.6 percent at 3,112.76 (close)

New York - Nasdaq: UP 0.5 percent at 8,566.67 (close)

London - FTSE 100: UP 0.4 percent at 7,188.50 (close)

Frankfurt - DAX 30: UP 1.2 percent at 13,140.57 (close)

Paris - CAC 40: UP 1.3 percent at 5,799.68 (close)

EURO STOXX 50: UP 1.4 percent at 3,660.02 (close)

Tokyo - Nikkei 225: DOWN 1.1 percent at 23,135.23 (close)

Hong Kong - Hang Seng: DOWN 1.3 percent at 26,062.56 (close)

Shanghai - Composite: DOWN 0.2 percent at 2,878.12 (close)

Pound/dollar: UP at $1.3102 from $1.2995 at 2200 GMT

Euro/pound: DOWN at 84.52 pence from 85.28

Euro/dollar: DOWN at 1.1076 from $1.1082

Dollar/yen: UP at 108.88 from 108.63 yen

Brent North Sea crude: UP 3.6 percent at $63.00 per barrel

West Texas Intermediate: UP 4.2 percent at $58.43 per barrel