Oil prices were choppy near $100 a barrel, while the yield on the benchmark 10-year Treasury note hovered around 4.97% after U.S. President Donald Trump warned in a speech to the UN General Assembly that he could "annihilate the Islamic Republic" if no deal is reached to end the Middle East conflict.
Investors also focused on a U.S.-China summit on Thursday, with traders speculating that the trade truce with Beijing could be extended and talks could touch upon AI regulation.
The S&P 500 was up 0.04% at 7,767.88 points. The Nasdaq gained 0.38% to 27,225.39 points. During the session it topped its June 1 intraday record high. The Dow Jones Industrial Average was down 0.35% at 51,868.18 points.
The S&P 500 was less than 0.5% below its August 13 record high close.
The S&P 500 is trading at just under 19 times expected earnings, its lowest valuation since 2023, according to LSEG data. AI-related heavyweights are responsible for much of the recent increase in earnings expectations.
JPMorgan Chase and Wells Fargo both dipped more than 3% on Tuesday.
Six of the 11 S&P 500 sector indexes rose, led by materials, up 1.76%, followed by a 1.15% gain in consumer staples.
Boston Federal Reserve President Susan Collins wrote she supported last week’s central bank interest rate increase, citing inflation risks. New York Fed President John Williams said the Fed's framework for controlling short-term rates has been effective in supporting financial markets.
Traders see a 53% chance the central bank will increase interest rates by at least 25 basis points in October, the CME Group's FedWatch Tool showed.
Advancing issues outnumbered falling ones within the S&P 500 by a 1.1-to-one ratio. The S&P 500 posted eight new highs and 11 new lows; the Nasdaq recorded 40 new highs and 90 new lows.
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