The US dollar and crude prices rose on Tuesday, spurred by ongoing optimism a US-China trade deal may be near, but a rally in global equity markets stalled as China pressed US President Donald Trump to remove recently imposed tariffs.
MSCI's gauge of global stock markets set a fresh 21-month high before the trading flat and the Nasdaq and Dow Jones industrial average hit new intraday record peaks before US stocks pared gains to trade little changed.
US and European government bond yields climbed, lifted by trade optimism and more upbeat economic data, but China's push to remove more U.S. tariffs imposed in September as part of a "phase one" trade deal raised doubts and spurred profit-taking.
"A phase one" trade deal is far from certain," said Fawad Razaqzada, technical analyst at FOREX.com in an investor note.
"So far it has just been promises of a deal underpinning both stocks and the yuan," he said. "It is possible that the rally in both markets will at the very least pause."
ISM's services data showed a reading of 54.7 in October from 52.6 the prior month, or above expectations of 53.4, according to economists polled by Reuters. The data was the latest to allay concerns of a slowdown in the US economy.
MSCI's gauge of stock indexes in 47 countries shed 0.01 percent while the pan-European STOXX 600 index of small, mid-sized and large stocks rose 0.10 percent.
On Wall Street, the Dow Jones Industrial Average rose 36.03 points, or 0.13 percent, to 27,498.14. The S&P 500 lost 1.62 points, or 0.05 percent, to 3,076.65 and the Nasdaq Composite added 5.38 points, or 0.06 percent, to 8,438.58.
In Asia, optimism was helped by the People's Bank of China's cut in its a medium-term lending rate, the first since early 2016. It was only a token 5 basis points to 3.25 percent, but it underscored Beijing's ongoing desire to support the economy.
Oil prices rose more than 1 percent on hopes of a trade deal while gold fell more than 1 percent, en route to its biggest one-day dip in more than a month.
Also driving crude higher were remarks by OPEC Secretary-General Mohammad Barkindo, who said the oil market outlook for 2020 may be brighter than previously forecast, appearing to downplay any need for deeper production cuts.
Brent crude futures for January delivery rose 88 cents to $63.01 a barrel, while US West Texas Intermediate (WTI) crude futures rose 76 cents to $57.30 a barrel.
The safe-haven yen and Swiss franc slid.
The dollar index, tracking the greenback against six major peers, rose 0.47 percent, with the euro down 0.54 percent to $1.1066. The Japanese yen weakened 0.50 percent versus the greenback at 109.14 per dollar.
Benchmark 10-year US Treasury notes fell 21/32 in price to yield 1.8619 percent. Germany's 10-year bond yield rose as high as -0.308 percent, while the French 10-year hit -0.006 percent to within striking distance of positive territory.