U.S. Stocks Gyrate, Dollar Gains On Economic, Geopolitical Concerns

U.S. stocks were mixed in choppy trading on Tuesday, while the dollar rallied in a risk-off session driven by economic uncertainties and simmering U.S.-China tensions.

The Nasdaq was last higher, but the S&P 500 and the Dow were red, with economically sensitive transports underperforming the broader market.

Meanwhile, the greenback outperforming most asset classes.

What we're seeing is a flight to safety," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

U.S. House of Representatives Speaker Nancy Pelosi's arrival in Taipei, despite warnings from Beijing, prompted Chinese war planes to buzz the Taiwan Strait in protest.

Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago, believes investors are more focused on the economy than geopolitics.

"What's happening in the markets is a push-and-pull about where we are economically," Nolte said. "It's a matter of whether the Fed continue to raise rates to fight inflation or pivot and stop raising rates as the economy weakens."

A report from the Labor Department showed job openings in the United States dropped by 5.4% in June, a sign that the jobs market is easing amid softening demand.

Softer demand for workers could translate to cooling wage inflation. Analysts expect Friday's employment report to show hourly earnings growth cooled 0.2 percentage point last month to 4.9%.

The Dow Jones Industrial Average fell 239.29 points, or 0.73%, to 32,559.11, the S&P 500 lost 6.12 points, or 0.15%, to 4,112.51 and the Nasdaq Composite added 35.93 points, or 0.29%, to 12,404.90.

Weak economic data and rising Sino-U.S. tensions also pulled European stocks to a lower close.

The pan-European STOXX 600 index lost 0.32% and MSCI's gauge of stocks across the globe shed 0.52%.

Emerging market stocks lost 1.16%. MSCI's broadest index of Asia-Pacific shares outside Japan closed 1.19% lower, while Japan's Nikkei lost 1.42%.

U.S. Treasury yields edged higher amid volatile trading, as the prospect of growth and attractive returns trumped geopolitical turmoil over Taiwan.

Benchmark 10-year notes last fell 38/32 in price to yield 2.741%, from 2.605% late on Monday.

The 30-year bond last fell 39/32 in price to yield 2.9879%, from 2.925% late on Monday.

Crude prices advanced ahead of the OPEC+ meeting of oil producers expected this week, the outcome of which could mean a boost to global crude supply, while lingering recession fears helped cap those gains.

U.S. crude rose 0.56% to settled at $94.42 per barrel, while Brent settled at $100.54, up 0.5% on the day.

While the dollar reversed recent losses against a basket of world currencies, the Japanese yen extended its against the greenback.

The dollar index rose 0.66%, with the euro down 0.73% to $1.0186.

The Japanese yen weakened 0.90% versus the greenback at 132.83 per dollar, while sterling was last trading at $1.2185, down 0.51% on the day.

Gold reversed earlier gains, and was last on a path to snap its four-day winning streak.

Spot gold dropped 0.3% to $1,766.76 an ounce.