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World stocks reversed earlier gains on Monday as underwhelming quarterly results from U.S. banks weighed on Wall Street, while oil prices fell as Russia mulled boosting production.

The U.S. benchmark S&P 500 stock index dipped after Goldman Sachs Group and Citigroup Inc both reported quarterly revenue below consensus estimates, though the index pared losses in afternoon trading.

MSCI’s gauge of global equities, which has risen more than 14 per cent this year, dipped 0.03 per cent on Wall Street’s negative turn.

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The U.S. earnings season is being used to gauge the strength of corporate America in the face of major challenges to growth.

While U.S. corporate earnings are widely expected to drop year-over-year for the first quarter, analysts anticipate an increase in revenue. As a result, equity investors will likely follow top-line results closely, said Oliver Pursche, chief market strategist at Bruderman Asset Management in New York.

“People are focusing on the revenue numbers, and they’re virtually in line if not slightly disappointing so far,” he said.

In Toronto, the S&P/TSX composite index finished unofficially up 34.93 points, or 0.21 per cent, at 16,515.46.

Material stocks led the way, rising 0.76 per cent. Lundin Mining Corp. jumped 8.1 per cent, while Ivanhoe Mines Ltd. and Nutrien Ltd. increased 3.3 per cent and 2 per cent, respectively.

Financial stocks rose 0.57 per cent with Power Financial Corp. rising 1.8 per cent and Great-West Lifeco Inc. increased 1.7 per cent.

Marijuana producers weighed on health care stocks, which fell 3.7 per cent. Aphria Inc. lost 14.2 per cent, while Cronos Group Inc. was down 6.6 per cent.

Based on the latest available data, the Dow Jones Industrial Average fell 30.13 points, or 0.11 per cent, to 26,382.17, the S&P 500 lost 1.88 points, or 0.06 per cent, to 2,905.53 and the Nasdaq Composite dropped 8.15 points, or 0.1 per cent, to 7,976.01.

Upbeat news on U.S.-China trade talks cushioned the disappointing revenue reports.

U.S. Treasury Secretary Steven Mnuchin said he hoped the trade talks were approaching a final lap. Reuters reported on Sunday that U.S. negotiators have tempered demands that China curb industrial subsidies as a condition for a trade deal after strong resistance from Beijing.

The trade optimism helped European equities edge upward, with the STOXX 600 closing up 0.15 per cent.

Oil prices, however, fell after Russia’s finance minister said Russia and OPEC may decide to boost production given record output from the United States.

Brent crude futures fell 32 cents to $71.23 a barrel, a 0.5-per-cent loss. U.S. West Texas Intermediate (WTI) crude futures fell 46 cents to $63.43 a barrel, a 0.7-per-cent loss.

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Monday’s trading marked a pause after last week’s rally, when Brent broke through the $70 threshold and U.S. crude posted six straight weeks of gains for the first time since early 2016.

This week, investors across asset classes will examine data for signs of whether a cooling in the global economy is turning around. The data includes Germany’s ZEW survey and Chinese gross domestic product due on Wednesday. U.S. retail sales and housing data, which will give a glimpse into whether the U.S. economy is withstanding the broader slowdown, are also scheduled for release this week.

“Every data release will be monitored and scrutinized by analysts to see if there are stronger underpinnings for the economy,” said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey. “Even if there is an earnings recession, it’s a positive if we see demand picking up.”

U.S. Treasury yields fell from four-week highs on Monday, while the dollar index, which measures the greenback against a basket of six other currencies, fell 0.02 percent. .

Benchmark 10-year notes last rose 2/32 in price to yield 2.5525 percent, from 2.56 percent late on Friday.

Reuters

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