Trump told the US stock market exactly what it wanted to hear. Now it's headed for its best day in 2 weeks.

trump xi chinaPresident Trump takes part in a welcoming ceremony with China's President Xi Jinping in Beijing.REUTERS/Thomas Peter

  • Stocks in the US soared Tuesday, extending earlier gains after President Donald Trump said he and Chinese President Xi Jinping are set to meet later this month at the G20 summit.
  • Trump said that the two sides will engage in discussions leading up to an "extended" conversation between Xi and him during G20.
  • Investors hope a resolution to the ongoing trade war will emerge from the leaders' meeting.
  • Trade tensions between the two global powerhouses have clouded the stock market for months as investors wonder when a deal will be reached.
  • Visit Markets Insider's homepage for more stories.

President Trump handed stateside stock investors a gift on Tuesday.

"Had a very good telephone conversation with President Xi of China," he wrote on Twitter. "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."

Equity markets in the US soared on that announcement, extending earlier overnight gains, as traders interpreted it as removing some worry that's hung over markets for months.

The S&P 500 and Dow Jones Industrial Average both jumped by more than 1%, with the S&P now within 1% of its May 1 record high. The Dow rose nearly 400 points. Meanwhile, the Nasdaq Composite climbed almost 2% at its peak. All three major indices were on pace for their best respective sessions since June 4.

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Trade tensions, big-tech regulation looming in the US, and a slowing global economy have all weighed on equities in recent months. With trade talks appearing to be on the table, at least for now, stocks are finding some reprieve.

Elsewhere, traders do not expect the Federal Reserve to cut interest rates at a two-day meeting ending Wednesday, though the market is anticipating a rate cut in July. Goldman Sachs strategists place the likelihood of a rate cut at the July Federal Open Market Committee meeting at 90%.

"With current dovish Fed pricing, potential policy disappointments increase the risk of rate shocks, especially given the strong equity performance this month, which was at least in part due to expectations for easier monetary policy," the firm's strategists wrote Monday in a client note.

West Texas Intermediate crude oil, battered since April and pushed into a bear market amid global growth and trade tensions, jumped by nearly 4%.

Several trade-sensitive US-listed stocks like Boeing and Micron jumped by nearly 4% and 6%, respectively. The broader semi space jumped along with it; the chip-tracking VanEck Vectors Semiconductor ETF jumped 4%.

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