Global stock markets rallied sharply on Monday, pushing U.S. equities to fresh record highs as easing trade tensions and expectations of an interest rate cut boosted investor sentiment.

The S&P 500 index climbed 1.2 percent, reaching an all-time high. Confidence strengthened as trade negotiations between the United States and China showed positive momentum. Both President Donald Trump and Chinese President Xi Jinping are reportedly preparing to announce diplomatic progress during a summit this week.

Chinese companies listed in the U.S. also saw gains, with their index rising 1.6 percent. The cryptocurrency market showed signs of recovery as well. Meanwhile, gold prices, which dropped more than 3 percent on Monday to below $4,000 per ounce, remained steady in early Tuesday trading.

Analysts say improved trade relations and expectations of lower interest rates have injected fresh energy into global markets. Investors are now shifting their focus to the upcoming U.S. Federal Reserve policy announcement, which will play a crucial role in guiding market direction in the days ahead.