FRANKFURT (dpa-AFX) - Following a strong start to the week, the German stock market continued its upward trend on Tuesday. Investors expressed relief after U.S. President Donald Trump postponed the deadline for introducing new tariffs and signaled willingness to negotiate with trading partners. The DAX ended trading up 0.55 percent at 24,206.91 points.

"With the European Union not having received a tariff letter, it becomes clear that negotiations between the U.S. and the EU are ongoing, and there remains hope for a deal," wrote market expert Jens Klatt from broker XTB. "This is driving the DAX towards new record highs." The German benchmark index is now just over one percent away from its record high set in early June.

The U.S.'s existing tariff agreements with countries such as China, the United Kingdom, and Vietnam have already brought relief to financial markets, said economist Michael Heise of HQ Trust. "Should a compromise be reached with the EU, whereby a flat tariff rate of ten percent is agreed on EU goods exports to the U.S., further relief for financial markets can be expected."

Another milestone was reached on Tuesday by the small-cap index SDAX. With a peak gain of 1.4 percent, the SDAX hit a record high at just under 17,861 points. The index closed up 1.21 percent. The MDAX of mid-cap stocks gained 1.01 percent to 31,057.91 points. The Eurozone blue-chip index EuroStoxx 50 rose 0.57 percent to 5,371.95 points.

Shares in Salzgitter surged by 20 percent. The boost came after news broke that a safety steel product had received approval for use by the German armed forces. The company now sees itself well positioned for the much-discussed restoration of European defense capabilities. Industry peers ThyssenKrupp and Klöckner & Co also posted significant gains.

Stocks of potential beneficiaries of record investments in German infrastructure climbed to multi-year highs. As the budget week began in the Bundestag, shares of rail and transport technology group Vossloh reached their highest level in 14 years. Shares in construction services provider Bilfinger even hit a record high.

Rheinmetall shares rose 1.5 percent to €1,830 following a positive analyst comment. U.S. bank Morgan Stanley raised its price target from €2,000 to €2,200. Shares in radar specialist Hensoldt and tank transmission manufacturer Renk advanced by 2.6 and 2.1 percent, respectively.

Daimler Truck gained 1.3 percent. Analyst Nick Housden from RBC Bank gave an overall positive assessment of the commercial vehicle maker's capital markets day.

Major stock exchanges outside the Eurozone also posted gains on Tuesday. Switzerland's SMI Index closed moderately higher, while London's FTSE 100 climbed by nearly half a percent. The U.S. benchmark Dow Jones Industrial was slightly lower at the close of European trading.

--- By Benjamin Krieger, dpa-AFX ---