US and European indices were mixed, and Asia mostly closed down, with analysts saying much was riding on the talks in London, which were in their second day.

US Commerce Secretary Howard Lutnick told Bloomberg Television that the talks were "going well" and that he expected Tuesday's discussions to last "all day".

With talks dragging on, "the lack of positive headlines weighed on stocks and the dollar," said Kathleen Brooks, research director at XTB trading platform.

Analysts said that any positive sign of agreement would fuel a rise in equities -- but that could be restrained.

"We wouldn't bank on a big turnaround thanks to any potential trade breakthroughs," said Thomas Mathews, head analyst of Asia Pacific markets for Capital Economics.

"We doubt that the US will back off completely. That's likely to restrain any relief rally," he said.

The talks were expected to be dominated by Chinese exports of rare earth minerals used in a wide range of things including smartphones, electric vehicle batteries and green technology.

In New York, the broad S&P 500 index and the tech-heavy Nasdaq were both trading higher, but the blue-chip Dow was struggling.

In Europe, Paris's CAC 40 was barely higher, and Frankfurt's Dax slipped.

European shares could be weakened by the conspicuous lack of any deal between Washington and Brussels before a July 9 deadline for 50-percent US tariffs to take effect.

Brooks said the upside for the dollar -- which was weaker on Tuesday -- was limited, depending on the scope of any US-China agreement.

"For the dollar to meaningfully retrace some recent losses, we do not think that positive headlines will be enough," she said.

"A trade agreement with an actionable plan to get trade between the US and China flowing freely for the long term is the only way to stop the slide in the buck, in our view."

While other markets sputtered, London's FTSE 100 index was on course to close at a record high after weak UK unemployment data raised the chances of the Bank of England cutting interest rates into next year, which often propels stock prices.

Investors are also awaiting key US inflation data this week, which could impact the Federal Reserve's monetary policy.

Analysts warn Trump's tariffs will refuel inflation, strengthening the argument to keep interest rates on hold instead of lowering them when the Fed meets next week.

The Fed faces pressure from the president to cut rates.

Oil prices ticked up, partly from continued uncertainty about the direction of US-Iran talks on Tehran's nuclear programme.

Iran said a new round of talks was planned for Sunday, in the Omani capital Muscat -- but Trump had earlier said the meeting was expected on Thursday. Each side has drawn up proposals for the other to consider.

- Key figures at around 1335 GMT -

New York - Dow: FLAT at 42,752.41 points

New York - S&P 500: UP 0.1 percent at 6,012.73

New York - Nasdaq Composite: UP 0.1 percent at 19,608.41

London - FTSE 100: UP 0.5 percent at 8,873.85

Paris - CAC 40: FLAT at 7,793.72

Frankfurt - DAX: DOWN 0.4 percent at 24,076.70

Tokyo - Nikkei 225: UP 0.3 percent at 38,211.51 (close)

Hong Kong - Hang Seng Index: DOWN 0.1 percent at 24,162.87 (close)

Shanghai - Composite: DOWN 0.4 percent at 3,384.82 (close)

Euro/dollar: UP at $1.1445 from $1.1420 on Monday

Pound/dollar: DOWN at $1.3531 from $1.3552

Dollar/yen: DOWN at 144.49 yen 144.60 yen

Euro/pound: UP 84.58 pence from 84.27 pence

Brent North Sea Crude: UP 0.4 percent at $67.33 per barrel

West Texas Intermediate: UP 0.4 percent at $65.53 per barrel

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