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* Trump says trade talks to restart, will meet Xi
* Tech boosts S&P; trade-sensitive industrials jump
* Two-day Fed policy meeting in focus
* Indexes up: Dow 1.43%, S&P 1.30%, Nasdaq 1.90% (Updates prices, adds comments)
By Shreyashi Sanyal
June 18 (Reuters) - U.S. stocks rallied on Tuesday, with the S&P 500 inching close to record levels, as President Donald Trump’s comments on restarting trade talks with China added to optimism of a more accommodative Federal Reserve.
Trump said he would meet with Chinese President Xi Jinping at the G20 summit later this month, and that talks between the two countries would restart after a long lull.
Trade-sensitive industrials jumped 1.92% on the development, while technology stocks gained 2.08%, the biggest boost to the benchmark index.
Chip companies, which have a sizable revenue exposure to China, led the rally among tech stocks, with the Philadelphia Semiconductor index surging 4.67%.
“Trump’s meeting with Xi was really what the markets had been hoping for to restart the trade negotiations. Right now the conversation is headed in a direction that’s removing the fear of a trade war,” said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York.
The prolonged trade war and its impact on economic growth had investors betting that the Fed would cut rates to preserve the current U.S. economic expansion, which would be the longest on record this summer.
The central bank is expected to leave interest rates unchanged at its two-day policy meeting ending Wednesday, but is widely seen as laying the foundation for a cut later this year.
The Fed is scheduled to release its statement at 2 p.m. EDT (1800 GMT) on Wednesday and Chairman Jerome Powell will address a press conference shortly after.
The S&P 500 has gained 5% so far this month on rate cut expectations, putting the benchmark index just 1% away from its all-time high hit in early May.
“Fed’s main task will be the same as always: Carefully craft its language as to not disappoint markets. ‘Yes, we may not cut right away, but don’t worry, anything goes wrong we’ll be right there to save you’,” said Craig Kirsner, president at Stuart Estate Planning Wealth Advisors in Coconut Creek, Florida.
Lifting sentiment was ECB President Mario Draghi’s comments indicating a possibility of fresh rate cuts or asset purchases.
At 11:16 a.m. ET, the Dow Jones Industrial Average was up 372.66 points, or 1.43%, at 26,485.19 and the S&P 500 was up 37.43 points, or 1.30%, at 2,927.10.
The Nasdaq Composite was up 149.21 points, or 1.90%, at 7,994.24.
Large-cap favorites such as Facebook Inc, Apple Inc , Amazon.com Inc, Microsoft Corp rose between 1.5% and 3%, the biggest boost to the Nasdaq.
Boeing Co gained 2.8%, lifting the Dow, after the planemaker received an order for its 737 MAX jets, which have been grounded, valued at more than $24 billion at list prices.
Facebook climbed 1.09% after it revealed plans to launch a cryptocurrency called Libra, the latest development in its effort to expand beyond social networking and move into e-commerce and global payments.
Only the defensive utilities, real estate and consumer staples sectors were among the decliners.
Advancing issues outnumbered decliners by a 4.83-to-1 ratio on the NYSE and by a 3.80-to-1 ratio on the Nasdaq.
The S&P index recorded 53 new 52-week highs and one new low, while the Nasdaq recorded 71 new highs and 25 new lows. (Reporting by Shreyashi Sanyal and Aparajita Saxena in Bengaluru; Editing by Sriraj Kalluvila)