U.S. stocks surged on Tuesday and the S&P 500 approached a record high after Washington rekindled trade talks with Beijing, boosting sentiment along with growing investor confidence that the U.S. Federal Reserve will cut interest rates this year.

The Dow Jones Industrial Average rose 354.74 points, or 1.36%, to 26,467.27, the S&P 500 gained 28.09 points, or 0.97%, to 2,917.76 and the Nasdaq Composite added 108.86 points, or 1.39%, to 7,953.88.

President Donald Trump said he would meet with Chinese President Xi Jinping at the G20 summit later this month, and said talks between the two countries would restart after a recent lull.

Global stock markets have rallied and retreated repeatedly in recent months in reaction to comments from Trump about the progress - or lack of progress - in negotiating an end to the trade conflict. Trump’s statement on Tuesday pushed up trade-sensitive industrials up 2.0% and technology stocks gained 1.9%. Together, they were the biggest boost to the benchmark index.

Chip companies, which have a sizable revenue exposure to China, led the rally in tech stocks, with the Philadelphia Semiconductor index surging 4.8%.

“We can’t discount how big a deal it is for China and the U.S. not to go into a prolonged trade spat. I don’t think we’re out of the woods yet, though,” said King Lip, chief investment strategist at Baker Avenue Asset Management in San Francisco.

“I’d wait for the G20 meeting to see actual discussions coming out of that before we go back into a risk-on mode,” he said.

The U.S.-China trade war and its impact on economic growth has investors increasingly expecting the Federal Reserve will cut rates to preserve the U.S. economic expansion, which would be the longest on record this summer.

The Fed is widely expected to leave interest rates unchanged at its two-day policy meeting that ends Wednesday, while laying the foundation for a cut later this year. The Fed is scheduled to release its statement at 2 p.m. (1800 GMT) on Wednesday and Chairman Jerome Powell will hold a press conference shortly after.

The S&P 500 has gained 6% so far this month, and is only about 1% from the all-time high hit in early May.

Comments by European Central Bank President Mario Draghi indicating the possibility of fresh rate cuts or asset purchases also lifted sentiment.

Apple Inc, Amazon.com Inc and Microsoft Corp rose between 1% and 2.5%, contributing the most to gains in the S&P 500 and Nasdaq.

Boeing Co jumped 4.7%, buoying the Dow, after the planemaker received an order for its 737 MAX jets valued at more than $24 billion at list prices; the 737 MAX has been grounded since March after two deadly crashes.

The utilities, real estate and consumer staples sectors, all of which are viewed as defensive, were the only decliners.

Advancing issues outnumbered declining ones on the NYSE by a 3.12-to-1 ratio; on Nasdaq, a 2.73-to-1 ratio favored advancers.

The S&P 500 posted 57 new 52-week highs and one new low; the Nasdaq Composite recorded 82 new highs and 37 new lows.