In the morning, transpiration increases. At that time, the roots cannot supply enough water and the plant uses its internal water reserves from the stem to meet the transpirational demand. As a result, the stem diameter shrinks.
At the end of the day, transpiration decreases, and the plant is able to refill its internal reserves. This causes the stem diameter to increases again.
During the night, a positive pressure in the stem cells allows the plant to grow.