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Stocks surged on Tuesday after President Donald Trump said he will be meeting with his Chinese counterpart, Xi Jinping, at the upcoming G-20 summit, boosting hope for a U.S.-China trade deal.
The Dow Jones Industrial Average jumped 324 points as Walgreens Boots Alliance and Intel outperformed. The S&P 500 climbed 1.1 percent while the Nasdaq Composite advanced 1.6 percent.
Trump said in a tweet he “had a very good telephone conversation” with Xi. He added: “We will be having an extended meeting next week at the G-20 in Japan. Our respective teams will begin talks prior to our meeting.”
Facebook was among the leaders, rising more than 2 percent after launching a new cryptocurrency called Libra. The social media company partnered with Visa, PayPal and other companies that will accept Libra payments.
Shares of Amazon, Netflix, Alphabet and Apple all traded more than 1 percent higher.
The Federal Reserve is meeting Tuesday and Wednesday, after which the central bank is expected to leave rates unchanged. However, investors will monitor whether policymakers at the central bank lay the groundwork for rate cuts later in the year. Traders are pricing in three rate cuts before year-end, according to the CME Group’s FedWatch tool.
“Short of easing tomorrow (about 20 percent priced in), Powell needs to send a strong enough message to the market” that rate cuts are coming, Gregory Faranello, head of U.S. rates at Amerivet Securities, said in a note. “I do feel, though, the Fed needs to take back some control here. We have gone from the market chasing the Fed (4 hikes) to the Fed chasing the market (3 cuts) in a very short period of time.”
The meeting comes after jobs growth and manufacturing activity in May slowed down. This, coupled with lingering worries over U.S.-China trade has led to increasing worries over the global economy.
Investors also cheered the prospects of more stimulative measures from Europe. Mario Draghi, president of the European Central Bank, said Tuesday: “In the absence of improvement, such that the sustained return of inflation to our aim is threatened, additional stimulus will be required.”
Draghi’s comments sent the euro sliding against the dollar.
Trump criticized Draghi’s remarks, tweeting on Tuesday morning that additional ECB stimulus makes it “unfairly easier” for Europe to compete with the U.S.