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By David Hodari 

U.S. stocks jumped Tuesday as investors weighed signs of progress in trade talks between Washington and Beijing.

The Dow Jones Industrial Average climbed 348 points, or 1.4%, to 24770 shortly after the opening bell. The S&P 500 rose 1.2% and the Nasdaq Composite added 1.3%.

U.S. stocks have been under pressure for much of the fourth quarter as investors worry about the fate of the U.S. and China's trade negotiations, which appeared to be deteriorating weeks ago.

But recent indications that Chinese officials could be open to amending a policy aimed at boosting firms' dominance in artificial intelligence and robotics--a key area of contention for the U.S.--helped boost optimism among investors. Stock futures also rallied earlier in the day after President Trump said on Twitter that "very productive conversations" were happening.

Companies that have become barometers for investors' optimism around trade talks rallied, with Caterpillar and Deere adding nearly 3% apiece.

Auto stocks also pushed higher, helped by reports that China's cabinet was considering proposals to cut tariffs on U.S.-made cars to 15% from 40%. Ford shares rose 2.1%, while General Motors advanced 2.7%.

Elsewhere, the Stoxx Europe 600 rose 2.2%, reversing course after U.K. Prime Minister Theresa May's postponement of a crucial Brexit vote in parliament Monday sent shares sliding.

The British pound rose 0.4% against the U.S. dollar, although sterling remained near the 18-month low it hit Monday.

Ms. May's shock decision to pull the vote served to further damage the reliability of U.K. assets for some investors.

"If you're a macro investor you're going to get blown out of the water by events like yesterday's," said John Wraith, head of U.K. rates strategy at UBS. "It makes investors incapable of trading those markets with any conviction whatsoever, so you see a lot of fund managers staying neutral and keeping their exposure to a minimum."

Elsewhere, India's Nifty 50 index slumped 1.9% following the resignation of the governor of its central bank.

Central banking policy was also a subject of focus in the U.S., where data showed producer prices--another gauge of inflation--rising for the third consecutive month.

Market participants widely expect the Federal Reserve to announce an increase in interest rates when it meets next week, with CME Group numbers giving a 75% probability of such an outcome.

Any forward guidance out of the Fed will be closely scrutinized, with some investors suggesting Chairman Jerome Powell has conveyed mixed messages over recent months, after first suggesting rates weren't close to neutral and then backtracking on those remarks.

"I think he got a bit ahead of himself saying that we're not close to neutral," said Mark Heppenstall, chief investment officer at Penn Mutual Asset Management. "I think that was language we weren't prepared for and it helped tip the market. Now I think you'll see his language more focused on gradual patience."

Write to David Hodari at David.Hodari@dowjones.com

(END) Dow Jones Newswires

December 11, 2018 10:16 ET (15:16 GMT)

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