The gold and materials sectors helped push Canada's main stock index into the red Tuesday, while U.S. markets bounced back after posting big losses Monday.
The retreat in metals comes as uncertainty continues over potential trade wars between China and the U.S., further fuelled by China's imposing of tariffs on roughly US$3 billion worth of U.S. goods Monday that analysts pointed to as a main cause of the day's retreat.
U.S. markets largely bounced back from those Tuesday with more than one per cent gains on the three main indexes, though there was no one clear driver on the day, said Luc de la Durantaye, managing director at CIBC Asset Management.
Markets did get some support on the margins from smaller positive news, including a Tesla production update and signs of consistency at the Federal Reserve Bank of New York, with an insider appointed to replace the current president, he said.
The recovery is important because main U.S. indexes have been testing their key 200 day moving average support, with the S&P 500 dipping below the level Monday and the Nasdaq also approaching.
"That obviously unnerves the market in general, and is probably going to put into question the trend in the equity market in the last few years," said de la Durantaye.
The S&P/TSX composite index closed down 32.69 points at 15,180.76, with financials and health care sectors also down.
In New York, the Dow Jones industrial average closed up 389.17 points at 24,033.36. The S&P 500 index was up 32.57 points at 2,614.45 and the Nasdaq composite index was up 71.16 points at 6,941.28.
The Canadian dollar averaged 78.05 cents US, up 0.58 of a US cent as oil prices edged higher.
Oil prices were boosted in part by OPEC comments that production levels are at the lowest in a year as Venezuela production declines, said de la Durantaye. Crude prices could also be getting a boost as an alternative investment to the volatile markets, he said.
"It's notable that oil prices, in the current equity market correction, have barely budged...That's an interesting area that maybe gives a place to hide in the current market volatility, away from technology."
The May crude contract closed up 50 cents at US$63.51 per barrel and the May natural gas contract was up one cent at US$2.69 per mmBTU.
The June gold contract ended down US$9.60 at US$1,337.30 an ounce and the May copper contract was up a penny at US$3.06 a pound.