Following reports that the mid-level trade talks in Beijing between US and Chinese delegations would continue for a third day on Wednesday - reports that have been confirmed by US trade delegation member Steven Winberg - WSJ claimed that the two sides are making progress, but they're "not ready to conclude a deal."

Trade negotiators from China and the US have narrowed some of their differences, Dow Jones reported on Tuesday.

The report, which cited sources, said the negotiators made progress on issues such as the purchase of US goods and services. it also said that a follow-up conversation between Cabinet-level officials is expected later this month. However, the two sides are still not ready to reach a deal just yet.

The positive trade news had sent stocks higher at the open as shares looked set to finally erase the last of their historic pre-Christmas drop...

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...but shortly after the latest batch of headlines, stocks suddenly ticked lower. So as they were initially bid on the trade headlines, it appears traders are now selling the news.

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Meanwhile, the divergence in US stocks, Treasury yields and the dollar that emerged on Monday has continued.

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