Optimism over trade sends U.S. stocks sharply higher

Potentially encouraging news on trade and interest rates put Wall Street in a buying mood Tuesday, driving the market to solid gains and sending the Dow Jones Industrial Average 350 points higher.

Technology stocks powered much of the rally as investors welcomed news that the leaders of the U.S. and China will meet face-toface next week to discuss their long-running trade dispute. Traders have been hoping for any positive sign in the trade war between the world’s largest economies.

It’s not the first time the market has rallied on seemingly encouraging developments on trade. Previous positive signs did not pan out, triggering market turbulence.

“You sort of have to ignore it a little bit,” said Tobias Carlisle, founder and portfolio manager at Acquirers Funds. “It’s probably going to drag out to the end of the year, so what we’re trying to do is buy something undervalued, and it’s great when there’s a day like today and it works.”

Markets also got a boost after the head of the European Central Bank said it was ready to cut interest rates and provide additional economic stimulus if necessary. The remarks put the spotlight on the Federal Reserve, which is set to announce its own decision on interest rates Wednesday.

The S&P 500 index climbed 28.08 points, or 1 percent to 2,917.75. The Dow gained 353.01 points, or 1.4 percent, to 26,465.54. The Nasdaq, which is heavily weighted with technology companies, jumped 108.86 points, or 1.4 percent, to 7,953.88.

The Russell 2000 index of smaller companies added 17.48 points, or 1.1 percent, to 1,550.23.

It was the second straight gain for the market, extending a strong rebound for stocks in June after a steep sell-off last month.

The benchmark S&P 500 is now less than 1 percent below its all-time high set on April 30. The Dow is 1.4 percent below its record high set October 3. The Nasdaq is about 2.5 percent below its record close set on May 3.