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A gauge of global stock markets rose in volatile trade on Tuesday following threats by U.S. President Donald Trump to shut down the government over a funding fight, though stocks in Europe advanced on signs of a thaw in the U.S.-China trade battle.

European shares closed higher, in part from a boost in auto shares, and Wall Street clawed higher after a report that China is moving to cut import tariffs on American-made cars, which market participants viewed as a sign China is ready to make concessions on trade.

That report came after Chinese Vice Premier Liu He exchanged views on the next stage of trade talks with U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer.

But U.S. stocks wobbled after the open and fell further after Trump openly sparred about government funding with the top two Democratic lawmakers during an Oval Office meeting, raising doubts a deal would be possible ahead of a deadline later this month.

“There are a lot of people who think gridlock is a good thing because you don’t get anything done, but I think gridlock is not a good thing,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

“I guess the upshot of the bickering suggests to me that a government shutdown is not out the cards by any means and that’s probably the most negative thing to come out of it,” Tuz said.

The Dow Jones Industrial Average fell 53.02 points, or 0.22 per cent, to 24,370.24, the S&P 500 lost 0.94 points, or 0.04 per cent, to 2,636.78 and the Nasdaq Composite added 11.31 points, or 0.16 per cent, to 7,031.83.

Canada’s main stock index also slipped on Tuesday as energy stocks dipped despite a modest rise in oil prices.

The Toronto Stock Exchange’s S&P/TSX composite index unofficially finished down 60.45 points, or 0.41 per cent, at 14,667.83. It reached a high of 14,957.81 early in the trading session.

After climbing almost 2 per cent early, the energy sector finished down 1.5 per cent. Suncor Energy Inc. dipped 2.2 per cent, while Canadian Natural Resources Ltd. fell 3.3 per cent.

Financial stocks fell 0.7 per cent with Canadian Imperial Bank of Commerce and Bank of Montreal both finishing down 1.1 per cent.

Marijuana producers led a 2.9-per-cent jump in health care stocks. Aphria Inc. rose 8.9 per cent, while Aurora Cannabis Inc. and Canopy Growth Corp. sat up 3.4 per cent and 6.2 per cent, respectively.

Germany’s DAX, which entered bear market territory last week and is Europe’s most China-sensitive market, climbed 1.5 per cent.

The pan-European STOXX 600 index rose 1.53 per cent, and MSCI’s gauge of stocks across the globe gained 0.35 percent, on track for a sixth straght decline.

The uncertainty over Britain’s exit from the European Union, or Brexit, continued to haunt investors and held sterling near 20-month lows after British Prime Minister Theresa May postponed a vote on her deal. On Tuesday, German leader Angela Merkel ruled out further Brexit negotiations but said efforts were being made to give Britain reassurances.

A spokesman for May said Britain’s parliament will vote on whether to approve her Brexit deal before Jan. 21.

Sterling was last trading at $1.2527, down 0.25 per cent after hitting a low of 1.249.

After an initial softening, the dollar index, which tracks the U.S. currency against six major peers, rose 0.22 per cent, with the euro down 0.33 per cent to $1.1318.

European bond markets were focused on France a day after President Emmanuel Macron announced wage rises for the poorest workers and tax cuts for pensioners, in further government concessions aimed at defusing weeks of often-violent protests, raising concerns over fiscal spending.

In response, French bond yields rose to their highest spread in 20 months over Germany’s yields, at 47.81 basis points.

Benchmark 10-year Treasury notes last fell 7/32 in price to yield 2.879 percent, from 2.856 percent late on Monday.

Oil prices rebounded after having sunk on Monday, buo

Oil futures edged higher on Tuesday after paring most of their gains as stock markets turned negative on worries about a possible U.S. government shutdown.

U.S. stock markets pulled back after President Donald Trump threatened to shut down the federal government over funding for a wall along the U.S.-Mexico border.

“It looks like the prospect of a U.S. government shutdown is not good for any asset class. Equities reacted first, taking oil prices down with it,” said John Kilduff, a partner at Again Capital Management in New York.

Prices rose over $1 a barrel earlier in the session after Libya’s National Oil Company (NOC) declared a force majeure on exports from the country’s biggest oilfield, which was seized last weekend by a militia group.

NOC said on Monday that the shutdown of the El Sharara oilfield would result in a production loss of 315,000 barrels per day (bpd), and an additional loss of 73,000 bpd at the El Feel oilfield.

After the strong start, Brent futures ended just 23 cents, or 0.4 per cent, higher at $60.20 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 65 cents, or 1.3 per cent, to $51.65.

Also adding pressure to the market, was Russia’s slower-than-expected planned cuts in production as part of an OPEC-led deal agreed last week to curb output by a joint 1.2 million bpd from January to shore up prices.

Reuters

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 24/05/24 4:00pm EDT.

SymbolName% changeLast
BMO-T
Bank of Montreal
+0.47%130.48
CNQ-T
Canadian Natural Resources Ltd.
+1.07%104.66
SU-T
Suncor Energy Inc
-0.16%55.06
WEED-T
Canopy Growth Corp
-0.08%12.52
ACB-T
Aurora Cannabis Inc
+2.71%9.08
CM-T
Canadian Imperial Bank of Commerce
+0.3%66.39

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