Markets were mixed on Tuesday.
The S&P 500 fell 0.2 percent while the STOXX Europe 600 rose 0.7 percent. Earlier in Asia, the Nikkei 225 plunged 2.1 percent but the Shanghai Composite rose 0.9 percent.
Oil fell, with West Texas Intermediate crude plunging 7.1 percent.
“The topside optimism the markets experienced after getting through the US midterms relatively unscathed has quickly reverted back to concern over trade issues between the US and China and the affect that tariffs and protectionist policies have had on overall global growth,” said Rakuten Securities Australia in a note.
“The real struggle for equity prices now are the highly visible potential for policy errors,” said Eric Wiegand, senior portfolio manager at US Bank.
Bob Doll, Nuveen Asset Management's chief equity strategist and senior portfolio manager, noted that stocks have yet to successfully retest the October lows.
“I don't think we're going to see a new high this year,” he said. “We're going to bounce around with a lot of side-wise volatility.”
Meanwhile, Goldman Sach's bear market indicator is "flashing red". Goldman chief global equity strategist Peter Oppenheimer said that the indicator is at a level where historically, “a correction followed by a rally is more likely to be followed by a bear market than when these indicators are low”.
“We remain bearish, as investor positioning does not yet signal 'The Big Low' in asset markets,” said Michael Hartnett, BofAML's chief investment strategist, in a statement.
However, the November BofAML fund manager survey indicated some optimism, with cash balances falling from 5.1 percent of portfolios to 4.7 percent.
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