Global stocks were range-bound on Tuesday while the yuan advanced against the dollar after Washington said it no longer considered China a currency manipulator and tensions eased between the economic titans.
New York was also rattled by news reports on Tuesday that US President Donald Trump intended to keep most punitive US tariffs on Chinese imports until after the 2020 presidential election.
US stocks finished lower, pulling back from Monday's records, while London rose and Europe edged downward.
The US Treasury announcement on the Chinese currency late Monday came as the two countries prepare to sign the first part of a wider trade agreement that has helped fan a rally in world equity markets.
Washington's decision triggered a sell-off in haven assets, including the yen and gold.
In August, Trump accused Beijing of weakening its currency "to steal our business and factories," re-stating a long-standing grievance.
The dollar slumped to 6.8670 yuan at one point, the lowest level since July, before rebounding somewhat.
"The yuan is the purest and best barometer to gauge the market's view on US-China trade tension," said AxiTrader's Stephen Innes.
"With the yuan strengthening ahead of the 'phase one' deal signing, it's indicating the potential for further improvement in trade relations."
The US reversal of China's status as a manipulator "is a most precise and definitive de-escalation of trade tension to date and provides a less congested road as we pivot to phase two of the broader trade agreement," Innes added.
Still, equity markets were a bit edgy ahead of Wednesday's expected signing of the US-China agreement.
Some investors have been expecting a pullback following the surge in recent weeks that have left the market in what analysts have called an "overbought" condition.
Earlier, Tokyo's main stocks index rose 0.7 percent as the dollar advanced against the yen owing to a rush out of safety -- giving a boost to Japan's exporters.
However, profit-taking saw Hong Kong drop 0.2 percent and Shanghai slip 0.3 percent following recent advances.
- Key figures at 2145 GMT -
New York - Dow: UP 0.1 percent at 28,939.67 (close)
New York - S&P 500: DOWN 0.2 percent at 3,283.15 (close)
New York - Nasdaq: DOWN 0.2 percent at 9.251.33 (close)
London - FTSE 100: UP 0.1 percent at 7,622.35 (close)
Frankfurt - DAX 30: FLAT at 13,456.49 (close)
Paris - CAC 40: UP 0.1 percent at 6,040.89 (close)
EURO STOXX 50: DOWN 0.1 percent at 3,774.88 (close)
Tokyo - Nikkei 225: UP 0.7 percent at 24,025.17 (close)
Hong Kong - Hang Seng: DOWN 0.2 percent at 28,885.14 (close)
Shanghai - Composite: DOWN 0.3 percent at 3,106.82 (close)
Dollar/yuan: DOWN at 6.8836 yuan from 6.8938 yuan
Pound/dollar: UP at $1.3019 from $1.2989
Euro/pound: DOWN at 85.46 pence from 85.72 pence
Euro/dollar: DOWN at $1.1126 from $1.1134
Dollar/yen: UP at 109.98 yen from 109.95
Brent Crude: UP 0.5 percent at $64.49 per barrel
West Texas Intermediate: UP 0.3 percent at $58.23 per barrel