The benchmark S&P 500 index ended little changed on Tuesday as investor optimism regarding the Federal Reserve's expected affirmation of its dovish policy stance was offset by reports of fault lines emerging in ongoing U.S.-China trade negotiations.
Financial stocks weighed on all three major U.S. stock indexes, which gave up early gains following a Bloomberg report that China is pushing back against American demands in trade talks.
The blue-chip Dow snapped a four-day winning streak, while the Nasdaq limped back into positive territory just before the closing bell.
"Trade fear has reared its head again with Trump administration concerns (that) China is walking back some of the pledges they've made in negotiations so far," said Chris Zaccarelli, chief investment officer at Alliance in Charlotte, NC.
Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama, agreed.
"China seems to be balking on some of the terms of the trade negotiations," Hellwig said. "And to me it sounds like there may be nervousness ahead of the Fed announcement."
As the Fed convened its two-day policy meeting, investors expected little change in its measured approach to interest rate hikes.
Its summary of economic projections - or "dot plot" - due for release on Wednesday, will be closely scrutinized for clues regarding the extent of the central bank's patience.
But some analysts question whether the dot plot deserves this level of scrutiny.
"The dot plot is consistently higher than where rates turned out to be, so the credibility hasn't been that good," Hellwig said. "But it gives insight was to what the members of the FOMC are thinking."
A report from the U.S. Commerce Department showed a smaller-than-expected increase in factory orders, the latest in a string of underwhelming economic data that has supported the Fed's more accommodative stance.
The Dow Jones Industrial Average fell 26.72 points, or 0.1 percent, to 25,887.38, the S&P 500 lost 0.37 points, or 0.01 percent, to 2,832.57 and the Nasdaq Composite added 9.47 points, or 0.12 percent, to 7,723.95.
Of the 11 major sectors of the S&P 500, eight closed in the red, with utilities and financials registering the biggest percentage drops.
Ford Motor Co shares rose 1.5 percent after the automaker announced it would boost U.S. production of its high-profit SUVs.
Online food delivery platform Grubhub Inc dropped 8.4 percent after Keybanc warned of diminished customer spending and user retention.
Nvidia Corp ended the session up 4.0 percent on news that the company has partnered with Softbank Group Corp and LG Uplus Corp to deploy cloud gaming servers in Japan and South Korea later this year.
The chipmaker provided the biggest boost to the Philadelphia SE Semiconductor Index, which has jumped by nearly 22 percent so far this year.
Declining issues outnumbered advancing ones on the NYSE by a 1.28-to-1 ratio; on Nasdaq, a 1.26-to-1 ratio favoured decliners.
The S&P 500 posted 41 new 52-week highs and no new lows; the Nasdaq Composite recorded 68 new highs and 36 new lows.
Volume on U.S. exchanges was 7.33 billion shares, compared with the 7.56 billion average over the last 20 trading days.