Dow closes 350 points higher after word of Trump-Xi meeting sparks rally

New York(CNN Business) Stocks rallied all the way into the close on Tuesday, both in the United States and elsewhere, as positive sentiment about trade took hold of the market.

President Donald Trump tweeted this morning to inform the public about a "very good telephone conversation" with Chinese Premier Xi Jinping. He said the two leaders would meet at the G20 summit in Japan next week.

Trump previously said that China would face additional import tariffs if Xi didn't show up to the summit.

That gave stocks a boost that lasted all day. The Dow (INDU) was up by more than 400 points at its high. It ultimately closed up 353 points, or 1.4%. The S&P 500 (SPX) and the Nasdaq Composite (COMP) finished 1% and 1.4% higher, respectively. European stocks also closed in the green.

For the month, the Dow and the S&P are up 6.7% and 6%, respectively. The Nasdaq is on track for a 6.7% jump this month. At this point, June is the best month for stocks since January.

Earlier in the day, European and Asian stocks had started to climb, after European Central Bank President Mario Draghi hinted there could be more monetary easing in the eurozone to boost the economy. US stock posted a stronger open in response.

Eurozone growth has been lagging for a while now, but having a stimulus commitment of the ECB is taking the edge off recession risk.

The euro, on the other hand, isn't taking the news so well and is down 0.2%, buying $1.1196. Currencies tend to strengthen in a higher interest rate environment. This was one of the key drivers behind US dollar strength last year.

President Donald Trump tweeted about the euro move, saying the dip in the euro was making it unfairly easier for European exports to compete with US exports.

"This week is supposed to be all about the Fed, but before Chairman Powell will have the opportunity to deliver a dovish message on Wednesday evening, ECB President Draghi has moved the markets by signaling that the eurozone could soon see a fresh dose of monetary policy stimulus," said Jane Foley, senior FX strategist at Rabobank, in a note.

The Federal Reserve is kicking off its two-day meeting today, before it culminates in the monetary policy update and press conference tomorrow. With expectations for an interest rate cut in July at 85% -- compared with 86% yesterday -- according to the CME FedWatch tool, investors will be watching Fed Chairman Jerome Powell's language when he talks about future policy strategy.

Market participants expect him to be careful with his wording, but that the word "patient" — which he introduced at the beginning of the year to describe the central bank's approach to future policy decisions — will disappear.