Canada's main stock index opened lower on Tuesday as oil prices fell and appetite for global stocks remained tentative.
The Toronto Stock Exchange's S&P/TSX composite index started the day down 35.7 points, or 0.23 per cent, at 15,206.18.
The Canadian dollar traded 0.1 per cent lower at $1.2592 to the greenback, or 79.42 U.S. cents. The currency traded in a range of $1.2567 to $1.2606.
U.S. stocks opened lower on Tuesday, after two days of gains that had somewhat cooled investor nerves about a burgeoning market correction.
The Dow Jones Industrial Average fell 154.4 points, or 0.63 per cent, to 24,446.87. The S&P 500 lost 14.73 points, or 0.554593 per cent, to 2,641.27. The Nasdaq Composite dropped 39.96 points, or 0.57 per cent, to 6,942.01.
The major U.S. indexes gained roughly 3 per cent over the past two trading sessions, their best such period since June 2016 and after finishing last week with their worst performance in two years.
"We saw an impressive rebound yesterday, but by no means are we in the clear," said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, NJ.
Cleveland Fed president Loretta Mester, a voting member in the central bank's rate-setting committee this year, said the recent stock market sell-off and jump in volatility will not damage the economy's overall strong prospects.
She said inflation should gradually rise this year to the central bank's two-percent target, but not at a rate that requires a faster reaction from the Federal Reserve in terms of raising interest rates.
The next reading on inflation, will come with consumer prices data on Wednesday. A strong number could stoke fears over price growth and faster rate hikes - the same worries that sparked the sell-off after strong jobs data on Feb. 2.
U.S. 10-year Treasury yields were hovering at 2.8439 per cent, falling back from a four-year peak of 2.9020-per-cent hit on Monday.
The CBOE Volatility Index, a widely-followed measure of short-term stock market volatility , opened at 26.94 points, after two days of relative calm. The index had jumped above 50 at the height of last week's sell-off.
The recent pullback has wiped out all of the year's gains for the benchmark S&P 500 and the blue-chip Dow Jones Industrial Average, which are down 0.5 per cent and 0.7 per cent, respectively, so far in 2018.
The tech-heavy Nasdaq was still clinging to a 1.2-per-cent gain for the year.
More than three-fifths of the companies on the S&P 500 have reported earnings, with nearly 78 per cent of them topping profit expectations, according to Thomson Reuters data. That is above the 72 per cent average beat-rate in the past four quarters.
Traders betting on the Goldilocks scenario of a not-too-hot, not-too-cold global economy came up against market bears again on Tuesday, with little sign yet of a winner emerging in their ongoing face-off.
Stocks see-sawed with solid gains in China and other Asian emerging markets offset by a tumble in Japan and then a red morning for most of Europe's bourses.
Tokyo's 0.65-per-cent fall had been compounded as the yen hit a five-month high amid a renewed bout of dollar weakness which had also helped lift bond and commodity markets after recent turbulence.
Copper, one of the industrial metals seen as a sensitive gauge of global economic health, climbed over 1.3 per cent , while Asia's overnight gains kept MSCI's 47-country world stocks index up 0.2 per cent despite Europe's subdued session.
"As long as we don't get dragged into (a U.S.) recession the market tends to recover quite quickly," said Donough Kilmurray, Managing Director, Investment Strategy Group at Goldman Sachs, seeing only a 10 percent chance of that this year.
Still, caution lingered in the broader markets following a U.S.-led tumble in riskier assets last week and ahead of U.S. inflation data on Wednesday. A stronger-than-expected reading on price pressures could trigger a fresh wave of selling.
There were niggling worries too about the trajectory of debt levels after U.S. President Donald Trump on Monday moved back his own deadline for a balanced budget.
The currency market remained choppy too.
Britain's pound was jolted to a session high of $1.3924 after headline annual UK inflation came in at 3.0 per cent, a tenth of a point above forecasts and holding close to its highest level in nearly six years.
The data highlighted the challenge the Bank of England faces as it tries to return price growth to target over the next two years.
The dollar's index against a basket of six major currencies fell over 0.5 per cent to 89.689 as the bears returned to give it its worst day of the month so far. Last week had been the greenback's best since 2016.
It was 1 per cent lower against the yen at 107.600 yen , while the euro added 0.4 per cent to $1.2322 and the Swiss franc also made ground.
"It looks like for now markets are reverting back to the weaker dollar theme, but I think that remains dependent on risk appetite recovering," said TD Securities' European head of currency strategy Ned Rumpeltin.
"You have this lingering feeling of risk-off in some markets so it is really hard to find a consistent story."
German bonds were also back in demand as recent multi-year highs on yields on both sides of the Atlantic proved attractive for some investors.
Germany's 10-year yield fell by almost 2 basis points to 0.73 as it retreated further from the 2-1/2 year high of 0.81 percent hit last week.
"I think what we are seeing is a little bit of a consolidation," said DZ Bank strategist Christian Lenk. "Given the pace of the move so far, we had to take a break somewhere and we have reached that region now."
Emerging markets cheered the weaker dollar and yields and commodity gains but as usual traffic was not one-way.
South Africa's rand fell as much as 0.25 per cent to 11.92 per dollar following after the country's ruling party African National Congress opted to sack President Jacob Zuma but was struggling to actually oust him.
The rand had risen 2 percent over the past two days, helped by hopes that Zuma would step down, but ran into resistance as the latest news was seen potentially prolonging a political standoff.
Other commodity-sensitive currencies fared better. The Australian dollar was steady at $0.7856 after rising about 0.6 per cent overnight on the back of higher commodity prices and improvement in broader risk sentiment.
Brent crude rose before easing off to $62.44 per barrel ahead of U.S. trading, while gold was 0.3 per cent higher at $1.326.51 an ounce.