U.S. stock indexes closed higher Tuesday, helped by gains in Nvidia and other chipmakers, as investors awaited possible negotiations between the United States and its trading partners for more clarity on Washington's tariff plans.

President Donald Trump and Chinese leader Xi Jinping are set to speak this week, the White House said on Monday, days after Trump accused China of violating a Geneva agreement to roll back tariffs and trade restrictions. Beijing said it would safeguard its interests and that the accusation was groundless.

The Trump administration wants countries to provide their best offer on trade negotiations by Wednesday as officials seek to accelerate talks with multiple partners ahead of a self-imposed deadline in just five weeks, according to a draft letter to negotiating partners seen by Reuters.

"The most important thing for investors is that the administration wasn't going to impose those much-larger-than-expected tariffs and just leave them on, which would have almost certainly led to a recession," said Chris Zaccarelli, Chief Investment Officer at Northlight Asset Management.

"The fact that the U.S. is actively engaged with so many trading partners – China, the UK, Japan, the EU, etc. – has investors feeling more optimistic that we will avoid a recession."

In May, a softening of Trump's harsh trade stance allowed a recovery in risky assets, with the benchmark S&P 500 and the tech-heavy Nasdaq posting their biggest monthly percentage gain since November 2023.

According to preliminary data, the S&P 500 gained 34.59 points, or 0.58%, to end at 5,970.53 points, while the Nasdaq Composite gained 157.54 points, or 0.82%, to 19,400.15 — bringing the Nasdaq back into positive territory for the year. The Dow Jones Industrial Average rose 219.19 points, or 0.52%, to 42,524.67.

Information technology stocks rose, boosted by gains in Nvidia. Chipmaker Broadcom hit a fresh record high after the company said it has begun to ship its latest networking chip that aims to speed AI.

"Commentary that Trump and Xi will speak started getting discussed yesterday and chips are likely a topic on the table," said Angelo Zino, a senior equity analyst at CFRA Research. "Given Nivdia is essentially currently locked out of China, any discussion is prone to favor Nivdia and chips rather than hurt the story."

A U.S. Labor Department report showed job openings increased in April, but layoffs picked up, signaling a slowing labor market as tariffs impact the economic outlook.

Factory orders dropped sharply in April, as the boost from front-loading of purchases ahead of tariffs faded. Data from the Commerce Department's Census Bureau showed a 3.7% fall, after an unrevised 3.4% jump in March.

Monthly jobs data on Friday will offer more signs on how trade uncertainty is affecting the world's biggest economy.

Central bank officials, including Fed Board Governor Lisa Cook, Chicago Fed President Austan Goolsbee and Dallas President Lorie Logan are due to speak through the day.

Shares of Kenvue dropped, leading declines on the benchmark S&P index. The company, which makes consumer health products, said at a Deutsche Bank conference that retailers in the U.S. and China are destocking products due to uncertainty over tariffs.

Dollar General surged as the discount retailer raised its annual sales forecast after surpassing quarterly sales expectations.

Shares of image-sharing platform Pinterest rose after JPMorgan raised the stock to overweight from neutral.

Shares of Reddit fell after the social media platform was down for over 29,000 users on Tuesday, according to outage tracking website Downdetector.com.