-China trade agreement, which is expected to be signed in Washington on Wednesday.
Bond yields edged higher while a gauge of global equity markets hit a record high on Monday, lifted by optimism over the planned signing this week of a U.S.
Even a partial deal should remove much of the uncertainty that has weighed on companies and investors, at least until after the US presidential election, said Scott Ladner, chief investment officer for Horizon Investments in Charlotte.
"Would the market be more satisfied with a reduction in those tariffs?"
"Our expectation is a solid earnings season - nothing extraordinary but nothing really awful", Kristina Hooper, chief global market strategist at Invesco Ltd., said on Bloomberg TV. "Nonetheless, you don't want to have an escalation in the tariff war".
In fact, he said, equities have been unusually calm since mid-October, and that itself is the more important trend to watch.
The S&P 500 index fell 4.98 points, or 0.2%, to 3,283.15.
The pan-European STOXX 600 index lost 0.18%.
The Nasdaq composite slid 22.60 points, or 0.2%, to 9,251.33.
The yield on the 10-year Treasury rose to 1.85% from 1.82%.
Bullish sentiment got another boost after the U.S. Treasury Department said it would drop its designation of China as a currency manipulator. Beijing, meanwhile, will step up its purchases of USA farm products and other goods.
With the trade issue entering a new stage, Wall Street is focusing on the rollout of corporate earnings reports over the next few weeks.
Stock indexes closed unevenly on Wall Street Tuesday as losses in technology companies outweighed gains elsewhere in the market. Citigroup shares gained 1.8%.
But Wells Fargo was an outlier, reporting its profit sank due to legal costs incurred from problems in its sales practices. That would mark the fourth consecutive quarter of lower earnings, the longest such stretch since a period from 2015 to 2016. Shares of JPMorgan rose $1.60, or 1.2%, to $138.80, while Citi rose $1.26, or 1.6%, to $81.91. Companies typically outperform forecasts and temper expectations for sharp declines by the time the bulk of financial reporting is done.
Many investors, however, are already looking ahead to a potentially rosier earnings outlook once Washington and China resolve their trade dispute.
"What we want to hear is what companies are seeing from their own customers, what are they hearing?" said Krosby. Investors in recent days have been cautiously optimistic about that accord as they await more information on the specific terms of the agreement.
United States stocks turned in a mixed performance on Tuesday as a slew of earnings from some of the country's biggest lenders began to roll in.
Health care stocks slumped, with insurance companies among the sector's biggest decliners. Meanwhile, Boston Scientific fell $2.81, or 6.2%, to $42.66 after the medical-devices maker warned its sales would fall shy of expectations.
Oil prices rocketed 73 cents to $58.31 USA a barrel. Brent crude oil, the global standard, gained 29 cents to $64.49.