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New York - A gauge of stocks in major markets fell on Tuesday for the first session in 10 after Chinese trade data reinforced views that the world's second-largest economy continues to lose momentum, while further clouding the market's view on US interest rates.
Crude futures ended lower after early gains.
China's exports fell less than expected in September but a sharper fall in imports left economists divided over whether the country's ailing trade sector is showing signs of turning around. The data was not enough to suggest a greater risk of a hard landing, but it did feed expectations that Beijing will soon add to stimulus measures.
St. Louis Federal Reserve President James Bullard, who opposed the decision to delay a rate hike when the Fed met in September, said recent economic data is unlikely to convince other policymakers to increase rates when the Fed meets in two weeks.
Fed Governor Daniel Tarullo said the Fed should not hike interest rates this year.
Fed chair Janet Yellen and Vice chair Stanley Fischer have recently said they support raising rates this year, but an increasingly vocal group of policymakers warn a global economic chill could weigh heavily on the US economy.
"The biggest market-moving news out is the Fed chitchat, and that's not really helping," said Kim Forrest, senior equity research analyst, Fort Pitt Capital Group in Pittsburgh. "They keep saying something is going to happen and nothing happens."
The Dow Jones industrial average fell 0.29 % to 17 081.89, the S&P 500 lost 0.68% to 2 003.69 and the Nasdaq Composite dropped 0.87% to 4 796.61.
The MSCI world share index fell 0.8%, ending its longest winning streak since February.
The FTSEurofirst 300 index ended down 0.9% and emerging market stocks fell 1.3%. Nikkei futures fell 1.4%.
Fort Pitt's Forrest said the weakness in stocks toward the market close could be attributed to "a little bit of nervousness out there as the real earnings season begins."
After the closing bell, JPMorgan started a string of reports from major U.S. banks. Within a week Goldman Sachs, Bank of America, Citigroup, Wells Fargo and Morgan Stanley will post results.
Oil bounce fizzles
Crude prices lost all their early gains. Brent settled down 1.2% at $49.24 per barrel after gaining 1.7% at its session high and WTI dropped 0.9% to settle at $46.66 after rising as much as 2.8%. Both fell more than 5% on Monday.
A slowdown in demand growth next year and added supply from Iran if sanctions against Tehran are lifted are likely to keep the oil market oversupplied through 2016, the International Energy Agency said.
Safe-haven US Treasuries prices rose after the Chinese trade data, while continued expectations for a later Fed rate liftoff also supported prices.
"It's all a global growth fear trade," said Priya Misra, head of global rates strategy at TD Securities in New York. She said the Chinese data was the main catalyst behind the demand for US government debt.
US 30-year Treasury bonds were last up 29/32 in price to yield 2.8827%, from a yield of 2.928% late on Friday. Benchmark 10-year notes were last up 16/32 to yield 2.0439%, from a yield of 2.099% late on Friday.
The US bond market was closed on Monday.
The dollar's value against a basket of six major currencies dipped less than 0.1% and earlier touched its lowest in nearly a month.
The euro added 0.2% against the greenback at $1.1381 and the yen also strengthened 0.2% at 119.76 per dollar.
