U.S. stocks finished the session lower as a surge in optimism over trade talks with China was offset by a plunge in crude prices. The pound rallied on reports of advancement toward a Brexit deal.

The S&P 500 ended Tuesday well off the day’s highs as West Texas crude hit a nine-month low, falling the most since 2011, after U.S. President Donald Trump criticized Saudi Arabia’s plan to cut output. The Dow Jones Industrial Average slid as Exxon Mobil and Chevron dropped. Treasuries climbed and the dollar fell from an 18-month high.

In Canada, the S&P/TSX composite index closed off 24.62 points to 15,131.78, led by a 2.8 per cent drop in the energy sector.

Stock indexes spent the morning on an upswing after White House economic adviser Larry Kudlow told CNBC that the U.S. and China are talking on “all levels” of government. That followed an overnight report that China’s Vice Premier Liu He will pave the way for a meeting between the leaders of the two biggest economies later this month. Caterpillar, 3M and megacap technology shares that react to trade headlines paced those gains in major equity benchmarks.

“What I think is going on in the market is a bit of a consolidation of the activity that took place yesterday. It’s a little bit of a repositioning of people’s portfolios,” said Steve Ricchiuto, chief U.S. economist at Mizuho Americas. “It’s reflected in very little price change and thin market behavior, a market where you’re seeing a rotation within asset classes.”

Britain’s pound surged after three days of losses as the U.K. and the European Union agreed on a draft Brexit divorce deal. Trade worries and Brexit negotiations have hung over markets for months, clouding the economic outlook and helping compound an ongoing sell-off in equities. While comments from Chinese Premier Li Keqiang in Singapore Tuesday hinted at a more optimistic outlook, sentiment overall remains fragile as the Federal Reserve pursues its path of policy normalization and tech companies continue to slide.

The Stoxx Europe 600 Index rose for the first time in three days, with telecom firms leading the way after Vodafone Group Plc’s results. The euro recovered from its weakest against the dollar since June 2017. Emerging market equities and currencies were steady.

These are the main moves in markets:

Stocks

The S&P 500 Index fell 0.2 per cent as of 4:04 p.m. New York time. The Stoxx Europe 600 Index rose 0.7 per cent. The U.K.’s FTSE Index rose less than 0.05 per cent. The MSCI Emerging Market Index fell less than 0.05 per cent.

Currencies

The Bloomberg Dollar Spot Index dipped 0.2 per cent. The euro gained 0.6 per cent to US$1.1283, the first advance in a week. The British pound gained 0.8 per cent to US$1.2956. The Japanese yen rose less than 0.05 per cent to 113.79 per dollar.

Bonds

The yield on 10-year Treasuries dipped four basis points to 3.14 per cent. Germany’s 10-year yield rose one basis point to 0.41 per cent. Britain’s 10-year yield gained seven basis points to 1.521 per cent.

Commodities

West Texas Intermediate crude fell 7.8 per cent to US$55.23 a barrel, an 11-month low. LME copper rose 0.4 per cent to US$6,073.00 a metric ton. Gold climbed 0.1 per cent to US$1,201.93 an ounce. The Bloomberg Commodity Index fell 0.7 per cent to an eight-week low.

-- With files from The Canadian Press