But the market's optimism faded today amid published reports questioning the scant details out of the Trump-Xi talks and growing skepticism that Beijing will yield to US demands anytime soon. Trump himself warned he would revert to tariffs if the two sides could not resolve their differences.
Asian stocks fell with American futures on Tuesday after confusing signals over U.S.
The S&P 500 lost 63 points, or 2.3 percent, to 2,727.
"People are still very concerned about the trade war", said Dan Suzuki, portfolio strategist at Richard Bernstein Advisors, according to CNN.
Technology companies, banks and industrial stocks accounted for much of the broad sell-off. "But predicting a recession if the curve inverts is getting ahead of ourselves".
As the markets opened Tuesday, President Trump began tweeting about his administration's trade negotiations with China.
In a much-anticipated weekend meeting between Donald Trump and Xi Jinping, the heads of the world's two biggest economies hammered out a deal that will see them hold off on their tit-for-tat tariffs row, which has roiled global equities for months.
The S&P 500 is down 60.11 points, or 2.2 percent.
On the other hand, China's Commerce Ministry said on Wednesday that the G-20 talks were "very successful" and that it was "confident" a deal could be reached within the next 90 days. "Financial markets are increasingly showing signs of fear of a recession".
The US stock and bond markets will be closed on Wednesday to mourn the death of former US President George H.W. Bush.
Meanwhile, markets also got a bit of a jolt Tuesday from remarks by John Williams, president of the Fed's NY regional bank.
Bond prices rose. The yield on the 10-year Treasury fell to 2.94 percent. During a briefing with reporters, John Williams said given his outlook for strong economic growth, he expects "further gradual increases in interest rates will best sponsor a sustained economic expansion".
The jitters helped drive demand for government bonds today, pushing prices higher.
On sectors, financials and industrials led the slide, declining 4.40 percent and 4.35 percent respectively. The slide in bond yields, which affect interest rates on mortgages and other consumer loans, weighed on bank stocks. The FTSE 100 index of leading British shares slid 0.6 per cent.
OPEC'S MOVE: OPEC countries gathered Thursday to find a way to support the falling price of oil, with analysts predicting the cartel and some key allies, like Russian Federation, would agree to cut production by at least 1 million barrels per day. Brent crude, the worldwide standard, added 0.9 percent to $62.22 per barrel in London. The euro declined to $1.1330 from $1.1343.