Chinese President Xi Jinping shakes hands with President Trump at the Great Hall of the People in Beijing on Nov. 9, 2017. (Nicolas Asfouri/AFP/Getty Images)

Stock markets surged Tuesday after President Trump said he will have an “extended meeting” next week with Chinese leader Xi Jinping, raising investors’ hopes that a truce on global trade could be within reach.

The Dow Jones industrial average jumped immediately Tuesday after Trump confirmed that the two will meet at the Group of 20 summit in Osaka, Japan, closing more than 350 points higher. Economists and business leaders have been pressing for de-escalation over worries that a protracted U.S.-China trade war might weaken the economy, both domestically and globally. “Had a very good telephone conversation with President Xi of China,” Trump tweeted. “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.”

After Trump’s tweets, the White House issued a statement confirming that he and Xi had discussed paths to a “fair and reciprocal economic relationship” in the morning call and would soon meet face to face.

“The two leaders discussed the importance of leveling the playing field for U.S. farmers, workers and businesses through a fair and reciprocal economic relationship,” the statement read. “This includes addressing structural barriers to trade with China and achieving meaningful reforms that are enforceable and verifiable."

By Tuesday’s close, the Dow was up 356 points, or 1.4 percent. The Standard & Poor’s 500 closed nearly 1 percent higher and the Nasdaq Composite index had advanced 1.4 percent.

Tuesday’s gains helped propel the Dow and S&P 500 closer to record highs set last fall, as investors anticipate a possible rate cut from the Federal Reserve. The central bank’s board, which is meeting Tuesday and Wednesday, will weigh the significant head winds from Trump’s multi-front trade war against other areas of relative economic strength, such as low unemployment rates and heightened consumer spending.

On Capitol Hill, Robert E. Lighthizer, the chief U.S. trade negotiator, addressed the effect of tariffs on the economy during an appearance Tuesday before the Senate Finance Committee. He told the panel that he wasn’t sure tariffs could force China to change its ways.

“I don’t know if it will get them to stop cheating, tariffs alone,” Lighthizer told lawmakers. “I think you don’t have any other option. I know one thing that won’t work and that is talking to them.”

Trump and Xi had their last face-to-face meeting in late 2018, at a G-20 summit in Argentina where they agreed to work toward a trade deal. But those talks — which at one point were “95 percent” complete, by Trump’s estimation — stalled after U.S. officials accused China of backtracking on some elements of their negotiations at the last minute.

Trump has since imposed tariffs on $250 billion in Chinese imports to the United States. He also threatened to impose tariffs on an additional $300 billion in goods if Xi refused to meet with him at the G-20 summit.

The potential fallout from the U.S.-China trade conflict extends well beyond their respective borders, political leaders and economists say. In a G-20 briefing note, Christine Lagarde, managing director of the International Monetary Fund, warned that the last round of proposed tariffs against China could erase $455 billion in global gross domestic product in 2020.

“There is strong evidence that the United States, China and the world economy are the losers from the current trade tensions,” she wrote.

The prevailing uncertainty around the trade war, as well as signs of a global slowdown, prompted JPMorgan Chase on Monday to predict a 45 percent chance of U.S. recession in 2020, up from 20 percent at the beginning of 2018. Outlooks dampened further after a key gauge of New York’s manufacturing industry recorded its biggest ever one-month drop.

European markets also climbed Tuesday after Mario Draghi, president of the European Central Bank, outlined plans for stimulus to boost the euro zone economy and combat inflation. Germany’s DAX and France’s CAC both were up more than 2 percent in late afternoon trading, and the Pan-European Stoxx 600 was up more than 1.6 percent.

After Draghi’s announcement, the euro dropped 0.2 percent against the dollar, prompting Trump to attack Draghi in tweets for making it “unfairly easier” for Europe to compete with the United States.

Throughout the morning, Trump continued to tweet about the gains in European markets in response to Draghi’s comments.

The United States is on the brink of recording its longest economic expansion — nearly a decade of growth since the end of the Great Recession in 2009. Trump has repeatedly taken credit for what he calls the “Trump economy,” and has even warned that a loss for him in 2020 would usher in economic ruin.

“If anyone but me takes over in 2020 (I know the competition very well), there will be a Market Crash the likes of which has not been seen before,” the president tweeted this weekend.