The surging price of oil lifted energy stocks on Wednesday, but other areas of the market were more subdued and U.S. indexes were mixed in early afternoon trading.
Investors are still gauging how worried to be about the prospect of a global trade war. Asian stocks slumped early in the day due to the concerns, only for European stocks to flip from losses to gains on signs that the Trump administration was taking a less combative stance in talks with China. U.S. stocks opened higher, but the gains evaporated as the day progressed.
KEEPING SCORE: The S&P 500 was down 0.2% at 2,716, as of 1:30 p.m. Eastern time, erasing an earlier gain of as much as 0.8%.
The Dow Jones Industrial Average fell 11 points, or 0.1%, to 24,271, and the Nasdaq composite fell 58 points, or 0.7%, to 7,504. More stocks fell on the New York Stock Exchange than rose.
ENERGIZED STOCKS: The price of crude jumped after a report showed that U.S. oil inventories dropped more sharply last week. Crude's price had already been rising on reports that the Trump administration is pushing other countries to stop importing oil from Iran.
That helped drive energy stocks in the S&P 500 up 1.6%. That was more than double the gain for any of the other 10 sectors that make up the index.
Concho Resources, a company that looks for oil and gas in New Mexico and west Texas, jumped 4.7% to $137.90. Helmerich & Payne, an oil drilling company, rose 3.3% to $65.07.
TRADE WORRIES: Stocks have swung in recent weeks as talks have grown more and less heated about trade between the United States and its partners, particularly China.
U.S. stocks rose at the open of trading after the Trump administration indicated it's shifting away from a plan to impose limits on Chinese investment in U.S. technology companies and high-tech exports to China. Instead, the administration is calling on Congress to enhance an existing review process. Investors took it as a sign of a softer stance after escalating rounds of tough talk, but the gains disappeared in the afternoon.
"Trade is the hot topic du jour, and it's having an impact on the market" said Barry Bannister, head of institutional equity strategy at Stifel.
It's only adding to pressures that have been mounting on the market, which he sees dropping over the next three months. Interest rates are rising, but more importantly to Bannister, so have interest rates after accounting for the effects of inflation. That is putting pressure on stock prices, and he expects this bull market that began in 2009 to end by the first quarter of 2020.
CHINESE BEARS: The tough talk on trade between the world's two largest economies has hit Chinese stocks particularly hard, and China's Shanghai Composite index continued to plummet with a 1 .1% drop on Wednesday. It's down more than 20% from its late January level.
"To a large extent, the Chinese market is one driven by speculation," said Jingyi Pan, a market strategist at IG in Singapore. "With sentiment rolling over itself of late, particularly over the escalating trade tensions that seem to have no end, it should be of little surprise to find the market crumbling."
MARKETS ABROAD: European stocks erased earlier losses to climb. France's CAC 40 gained 0.9%, Germany's DAX rose 0.3% and the FTSE 100 in London added 1.1%.
Asian markets, which closed earlier, mostly fell. Japan's Nikkei 225 lost 0.3%, and South Korea's Kospi sank 0.4%.
FILLING UP: Conagra Brands recorded the biggest loss among stocks in the S&P 500 after it agreed to buy Pinnacle Foods, the company behind Duncan Hines and Hungry-Man, in a deal that would create a frozen-food giant. The cash-and-stock bid is valued at more than $8 billion, not including Pinnacle Foods' debt.
Conagra also reported stronger earnings for the latest quarter than analysts expected. Its shares nevertheless dropped 7% to $35.56.
CURRENCIES: The dollar edged up to 110.22 Japanese yen from 110.13 yen late Tuesday. The euro fell to $1.1586 from $1.1650, and the British pound dropped to $1.3145 from $1.3232. YIELDS: The yield on the 10-year Treasury dropped to 2.83% from 2.88% late Tuesday. The two-year yield fell to 2.49% from 2.53% , and the 30-year sank to 2.98% from 3.02%.
Gold slipped $3.50 to $1,256.40 per ounce.
COMMODITIES: Benchmark U.S. crude rose $2.18, or 3.1%, to $72.71. Brent crude, the international standard, rose $1.45 to $77.59 per barrel.