Wall Street stocks rallied after two straight losing sessions Thursday, while oil prices gyrated as OPEC+ decided to go forward with a scheduled production hike.

Major US indices spent most of the session in positive territory and finished solidly higher despite worries about the latest Covid-19 variant and the risk of a US government shutdown.

"I wouldn't read too much into today's price action," said Terry Sandven, chief equity strategist at US Bank Wealth Management, adding that the "market is rallying today after a period of weakness over the last couple of weeks."

All three major indices advanced, with the broad-based S&P 500 winning 1.4 percent.

Despite the gains, worries about the Omicron variant, rising inflation and political dysfunction still hang over the market.

US President Joe Biden unveiled a raft of actions designed to tamp down Covid-19, including new testing requirements for travelers. The moves come as the Omicron variant spreads worldwide.

Biden has struggled to win over skeptics of his efforts against the pandemic, including critics of his policies establishing mandatory vaccinations.

A group of Republicans in the Senate has objected to his vaccine mandates and threatened to derail an agreement in Congress to prevent a government shutdown.

Earlier, both Paris and Frankfurt dropped more than one percent after a mixed Asian session.

German Chancellor Angela Merkel announced sweeping curbs on people not vaccinated against Covid-19 to combat the latest surge in cases.

"Culture and leisure nationwide will be open only to those who have been vaccinated or recovered," Merkel said, adding that the same rule would also apply to non-essential shops.

Elsewhere, oil prices swung sharply as OPEC+ decided to go forward with a scheduled production hike despite the threat Omicron may stifle energy demand.

Oil prices had been rising ahead of the meeting of OPEC and its allies amid expectations they would pause their modest monthly crude production increases given the added uncertainty Omicron brings to global demand.

But after meeting for a little over an hour on Thursday afternoon via video conference, the 13 members of the Vienna-based group and their 10 allies decided to stick with a modest increase in output of 400,000 barrels per-day every month, as they have been doing since May.

Oil prices initially sunk on the announcement, but later recovered their losses, with both major futures benchmarks ending higher.

Investors are keeping a close eye on the US election, which comes against the backdrop of the coronavirus pandemic Investors are keeping a close eye on the US election, which comes against the backdrop of the coronavirus pandemic Photo: AFP / TIMOTHY A. CLARY

Ann-Louise Hittle, head of oils research at Wood Mackenzie, said that "in a highly uncertain situation, the best option is to stick with the plan. That is exactly what OPEC+ has done today."

New York - Dow: UP 1.8 percent at 34,639.79 (close)

New York - S&P 500: UP 1.4 percent at 4,577.10 (close)

New York - Nasdaq: UP 0.8 percent at 15,381.32 (close)

London - FTSE 100: DOWN 0.5 percent at 7,129.21 (close)

Frankfurt - DAX: DOWN 1.4 percent at 15,263.11 (close)

Paris - CAC 40: DOWN 1.2 percent at 6,795.75 (close)

EURO STOXX 50: DOWN 1.7 percent at 4,108.02 (close)

Tokyo - Nikkei 225: DOWN 0.6 percent at 27,753.37 (close)

Hong Kong - Hang Seng Index: UP 0.5 percent at 23,788.93 (close)

Shanghai - Composite: DOWN 0.1 percent at 3,573.84 (close)

West Texas Intermediate: UP 1.4 percent to $66.50 per barrel

Brent North Sea crude: UP 1.2 percent at $69.67 per barrel

Euro/dollar: DOWN at $1.1306 from $1.1320 at 2200 GMT on Wednesday