Investing.com – Wall Street surged on Tuesday after U.S. President Donald Trump tweeted that he had spoken with his Chinese counterpart, President Xi Jinping.
The conversation was “good” Trump tweeted and trade talks would resume ahead of a planned meeting at the G-20 meeting next week.
Talks between the two countries had been on hold after Washington effectively banned American companies from doing business with Chinese tech giant Huawei.
The Dow surged 333 points, or 1.3%, by 10:06 AM ET (14:06 GMT), while the S&P 500 rose 35 points, or 1.2%, and the tech-heavy Nasdaq composite gained 145 points, or 1.9%.
Meanwhile, stimulus hints from the European Central Bank increased expectations of the Federal Reserve turning dovish. ECB President Mario Draghi hinted on Tuesday that rate cuts or further asset purchases would be warranted unless inflation in the eurozone picks up, which seems unlikely due to the global slowdown caused in part by U.S.-China trade tensions.
Draghi’s comments increased investor expectations that the Fed will also cut rates this year, as the central bank begins its two-day policy meeting.
"A rate cut this week is off the table. But all eyes and ears will be tuned into what the Fed chairman says about the outlook and how he hints about what is next," said Steven Skancke, chief economic adviser at wealth management and investment advisory firm Keel Point.
Boeing (NYSE:BA) rose 1.6% after the open as it managed to snag new orders at the Paris Air Show. The company has been struggling to recover from two fatal crashes involving its 737 Max jet.
Amazon.com (NASDAQ:AMZN) jumped 1.6%, while Apple (NASDAQ:AAPL) was up 3% and Tesla (NASDAQ:TSLA) gained 3.7%.
In commodities, crude surged 2.5% to $53.54 a barrel, gold futures rose 0.3% to $1,347.35 a troy ounce, while the U.S. dollar index, which measures the greenback against a basket of six major currencies, gained 0.2% to 97.23.
-- Reuters contributed to this report.