The S&P 500 coughed up a morning rebound effort to close Monday with a loss of 0.2%. The benchmark index had climbed as high as 1.0% amid early U.S.-China trade optimism, but energy stocks eventually led the broader market lower as oil prices tanked.

Meanwhile, the Dow Jones Industrial Average lost 0.4%, the Nasdaq Composite finished flat, and the Russell 2000 lost 0.3%.

WTI crude fell 7.0% to $55.67/bbl, extending its losing streak to 12 straight sessions and settling at its lowest level since November 2017. Crude extended losses in the wake of OPEC's monthly supply report, in which it cut its 2019 oil demand forecast for the fourth consecutive month. Likewise, the oil-sensitive energy sector dropped 2.4%, and energy component Haliburton (HAL 32.27, -1.89) surrendered 5.5%.

With Tuesday's losses, the S&P 500 energy sector is down 13.9% since the start of October while WTI crude has plummeted 27.6% from its October 3 high. Falling oil prices have been a major factor with the sector's performance, as investors have called earnings prospects into question. 

Nevertheless, leading the S&P sector standings on Tuesday were the financials (+0.6%), industrials (+0.5%), and utilities (+0.4%) sectors. The trade-sensitive industrials group had a relatively strong performance after National Economic Council Director Larry Kudlow confirmed that the U.S. and China have resumed trade discussions.

The information technology sector added a slim gain of 0.1% but traded as high as 1.8%. Apple (AAPL 192.23, -1.94) lost 1.0% amid another guidance warning from one of its suppliers, Qorvo (QRVO 63.65, -0.15, -0.2%), which cut its guidance due to "recent demand changes for flagship smartphones." The Philadelphia Semiconductor Index added 1.4% to follow the prior session's drop of 4.4%.

Separately, Boeing (BA 349.51, -7.52, -2.1%) was pressured by a Wall Street Journal report, which cited safety experts alleging Boeing withheld information about a new flight-control feature that may have contributed to the Lion Air crash in October.

In earnings, Dow component Home Depot (HD 179.00, -0.43, -0.2%) was unable to provide support to the blue-chip average despite an upbeat report. The home improvement retailer beat profit estimates and raised its earnings guidance for its fiscal year.

Elsewhere, U.S. Treasuries jumped, pushing yields lower across the curve. The 2-yr yield lost five basis points to 2.88%, and the 10-yr yield lost four basis points to 3.15%. Meanwhile, the U.S. Dollar Index decreased 0.4% to 97.19.

Overseas, global markets edged mostly higher on Tuesday with China's Shanghai Composite (+0.9%) and Germany's DAX (+1.3%) showing relative strength.

Reviewing Tuesday's economic data, which included the NFIB Small Business Optimism Index for October and the Treasury Budget for October:

• The NFIB Small Business Optimism Index for October (Briefing.com consensus 108.0) decreased to 107.4 from last month's reading of 107.9.
• The Treasury Budget for October showed a deficit of $100.5 billion versus a deficit of $63.2 billion for the same period a year ago. The Treasury Budget data is not seasonally adjusted, so the October deficit cannot be compared to the $119.1 billion surplus for September.
  • The budget deficit over the last 12 months has totaled $817.3 billion

Looking ahead, investors will receive the Consumer Price Index for October and the weekly MBA Mortgage Applications Index on Wednesday.

• Nasdaq Composite +4.3% YTD
• Dow Jones Industrial Average +2.3% YTD
• S&P 500 +1.8% YTD
• Russell 2000 -1.4% YTD