Stocks closed higher on Tuesday following news that the U.S. temporarily eased restrictions on Chinese telecom giant Huawei.

The Dow Jones Industrial Average rose 197.43 points to 25,877.33 as Intel outperformed. The gained 0.9% to end the day at 2,864.36, with the tech sector jumping 1.2%. The Nasdaq Composite advanced 1.1% to 7,785.72.

Equities also got a boost from Boeing. Shares of the airplane maker rose 1.7% after U.S. aviation officials that a bird collision may have caused the 737 Max crash in March.

The Commerce Department said Monday night it would allow Huawei to purchase American-made goods in order to maintain existing networks and provide software updates to existing Huawei handsets until Aug. 19. The move sought to minimize disruption for the telecom company's customers around the world. The initial restrictions worried investors that the ongoing U.S.-China trade war was intensifying.

"That's another ray of hope that we can avoid the worst-case scenario," said Art Hogan, chief market strategist at National Securities. "The market tends to be seizing on the positive undertones in trade."

"It felt like they needed to show some flexibility in the administration," Hogan said. "A week ago Sunday, it seemed like we were heading into no-man's land on trade."