Stocks rallied on Tuesday after President Donald Trump said over the holiday weekend that he agreed to delay tariffs of 50% on the European Union.

The Dow Jones Industrial Average gained 740.58 points, or 1.78%, to finish at 42,343.65, while the S&P 500 rose 2.05% to 5,921.54. Both snapped four-day losing streaks. The Nasdaq Composite popped 2.47% to 19,199.16 as technology names like Tesla saw outsized gains.

Trump on Sunday said that he would push back the 50% levy deadline on the EU to July 9 following a request from Ursula von der Leyen, the president of the European Commission. That comes after Trump last week proposed an import tax of 50% on the EU beginning June 1.

National Economic Council director Kevin Hassett said on CNBC's "Squawk Box" that he expects to "see a few more deals even this week." U.S. consumer confidence data released Tuesday came in stronger than expected for May on hopes of trade agreements.

Tesla shares popped about 7% after CEO Elon Musk said he was shifting his focus away from politics and back into his companies. Other tech-related names were also higher, including Nvidia, AMD, Apple and Microsoft.

Outside of tech, U.S. Steel shares advanced roughly 2% after sources familiar told CNBC that Japan's Nippon Steel is expected to close its acquisition for $55 per share.

Stocks saw a broad rally to begin the shortened trading week after the U.S. equities market was closed Monday in recognition of Memorial Day. More than nine out of 10 S&P 500 stocks were higher. Small caps also saw gains, with the Russell 2000 climbing about 2.5%.

Tuesday's action follows a losing week on Wall Street. The Dow, S&P 500 and Nasdaq Composite all slid more than 2% as Trump's initial call for tariffs on the EU worried market participants.

"It seems like the long holiday weekend only served to build up momentum for today's whipsaw," said Dann Ryan, managing partner at Sincerus Advisory. "The trade tensions that had flared have already been extinguished, yet again, and now they'll include an express lane."

Traders this week will follow earnings from Okta due after the bell Tuesday, followed by companies such as Nvidia, Macy's and Costco later in the week. More than 95% of S&P 500 companies have reported this earnings season and almost 78% have surpassed analyst expectations, according to FactSet.