TRADE WAR: On Friday, China announced new tariffs on $75 billion in USA goods.
Crude oil prices rose (link)after a large drop in US inventories with West Texas Intermediate for elivery up 85 cents, or 1.6%, to settle at $55.78 a barrel on the New York Mercantile Exchange.
Energy companies also rose along with the price of crude oil.
Retailers were also doing well. This was its most inverted level since May 2007 and is the offshoot of investors fleeing to safe-haven assets like USA government bonds as Trump's trade war against China continues.
The yield on Australia's benchmark 10-year note, which moves inversely to its price, slumped almost 3-1/2 basis points to 0.884 percent, the yield on the long-term 30-year bond plunged 6 basis points to 1.489 percent and the yield on short-term 2-year slipped 1-1/2 basis points to 0.724 percent by 03:50GMT. The two-year was at 1.50%, down from 1.52% a day earlier. The yield for the 10-year Treasury has been dipping below that of the 2-year this week. An inverted yield curve has preceded past recessions.
The last time the markets saw an inversion of this part of the yield curve was the one that began in December 2005, or two years prior to the financial crisis and subsequent recession. The escalation of the U.S.
The US-China trade war has also escalated recently.
The market is on track to end the week with a gain after having declined the past four weeks in a row.
Amazon says Tesla's solar panels caught fire on one of its buildings
The claims threaten to further erode Tesla's solar business at a time when the company is fighting to gain back market share. The fires caused significant damage to Walmart's store merchandise and caused millions of dollars in damage.
The major indexes are all down at least 3.7% for the month of August.
Among the 11-major S&P 500 sectors, the risk-sensitive Technology and the Communication Services indexes are down 1% and 0.5% on the day to lead the losers. The euro weakened to $1.1093 from $1.1098.
Early on Tuesday the indexes appeared poised to extend the gains from Monday's rally.
Concerns about Brexit are already taking a toll on Europe, with the recent export slump in Germany driven mainly by weaker sales to Britain rather than the broader trade war.
"Markets are trading higher as investors await news on the China trade front", said Cayman Wills, global head of equities at J.P. Morgan Private Bank.
In an interview with Bloomberg, Treasury Secretary Steven Mnuchin said talks with China are ongoing and are expected to continue in Washington, though he did not specify when.
The Japanese yen strengthened 0.35 per cent versus the greenback at 105.77 per dollar, while Sterling was last trading at US$1.2285, up 0.57 per cent on the day.
That means products such as smartwatches, Bluetooth headphones, flat panel televisions and many types of footwear will be levied from next month, raising worries about USA consumption, one of the few remaining bright spots in the world economy.
On the data front, US consumer confidence weakened a bit in August even though consumers' optimism on their present situation hit its strongest level since late 2000, the Conference Board said.