US benchmark equity indexes closed higher on Wednesday as markets showed optimistism on President Donald Trump's offer to reduce US tariffs on China.

The Nasdaq Composite increased 2.3% to 16,670.20, while the S&P 500 gained 1.4% to 5,359.62. The Dow Jones Industrial Average was up 0.8% to 39,506.70. Technology and consumer discretionary were the top gainers, while consumer staples and energy were the only sectors declining.

US Treasury yields were mixed, with the 10-year rate decreasing fractionally to 4.39% and the two-year rate was up 7.3 basis points to 3.86%.

June West Texas Intermediate crude oil increased 2.2% to $62.30 a barrel on Wednesday.

Trump said Tuesday that tariffs on China "will come down substantially but it won't be zero," Bloomberg News reported.

In economic news, new home sales in the US increased more than expected in March as median prices dropped, government data showed.

"We still see limited upside for sales in 2025 given our forecast for mortgage rates to remain elevated and the economy to weaken in response to the Trump administration's tariff policies," Oxford Economics said.

Mortgage applications in the US dropped about 13% on a seasonally adjusted basis in the week ended Friday, as rates hit the highest level in two months, the Mortgage Bankers Association reported.

"Similar to the previous week, economic uncertainty and rate volatility impacted prospective homebuyers," said MBA Chief Economist Joel Kan.

In company news, Amphenol (APH) was the top gainer on the S&P 500, with shares up 8.2%. The company issued an upbeat second-quarter outlook following a first-quarter beat.

Palantir Technologies (PLTR) shares jumped 7.3%. The company is collaborating with Alphabet's (GOOG, GOOGL) Google Public Sector to launch FedStart on Google Cloud.

Novavax (NVAX) shares jumped nearly 20% after it said Wednesday it believes its biologics license application for its COVID-19 vaccine is "approvable" by the US Food and Drug Administration based on ongoing discussions.

Enphase Energy (ENPH) saw the steepest decline on the S&P 500, down 16%. The company's first quarter non-GAAP earnings and revenue missed analysts' estimates.

Gold dropped 3.4% to $3,302.40 per troy ounce, while silver was up 2.1% to $33.60 per troy ounce.