U.S. stocks ended higher on Tuesday on renewed hopes of the country' s tax reform.

The Dow Jones Industrial Average rose 196.14 points, or 0.90 percent, to 21,899.89. The S&P 500 gained 24.14 points, or 0.99 percent, to 2,452.51. The Nasdaq Composite Index was up 84.35 points, or 1.36 percent, to 6,297.48.

It was reported on Tuesday that the Trump administration and key lawmakers had found common ground on how to approach tax reform. Analysts said the market was mostly boosted by the news that the White House and Republicans are making progress on tax legislation.

Meanwhile, investors were also awaiting the closely-watched meeting among central bank officials later this week.

U.S. Federal Reserve officials are expected to be joined by European Central Bank President Mario Draghi and the Bank of Japan governor Haruhiko Kuroda on Friday at the annual Economic Policy Symposium in Jackson Hole in the U.S. state of Wyoming.

This year's topic will be "Fostering a Dynamic Global Economy" and investors are hoping to get clues related to the global monetary policy.

Expectations for tighter monetary policy in the U.S. have been dampened recently by soft inflation data. Market expectations for a rate hike in December are just 41 percent, according to the CME Group's FedWatch tool.