Wall Street has reversed early gains, backing down from the previous session’s record closing highs, while crude oil gained ground as investors looked to Washington for signs that an enhanced stimulus package would pass a Senate vote.

All three major US stock indexes oscillated amid light trading volume on Tuesday, but were most recently lower as market participants balanced near-term challenges with longer-term hopes for economic recovery and a return to healthy demand.

“The plan that was originally signed is baked in,” said Joseph Sroka, chief investment officer at NovaPoint in Atlanta.

“The question as to whether the bigger individual cheques get passed is up for debate.”

“The more speculative parts of the market are a little more red than the market as a whole.

“It may mean that it’s time to put 2020 in the review mirror and take some money off the table. It’s been a long year and there’s a lot of tired investors out there.”

The US House of Representatives voted on Monday to meet President Donald Trump’s demand for $US2,000 direct payments to Americans as part of the recently signed fiscal relief bill, sending the measure to the Republican-controlled Senate.

Senate Majority Leader Mitch McConnell blocked an effort to approve the direct payments by unanimous consent, but said the chamber would address the increased stimulus cheques this week.

Vaccine trials and distribution gather momentum around the world as global COVID-19 cases surpass 81 million and deaths approach 1.8 million.

In the United States, there have been more than 19 million cumulative cases and nearly 335,000 deaths.

The Dow Jones Industrial Average fell 95.25 points, or 0.31 per cent, to 30,308.72, the S&P 500 lost 9.84 points, or 0.26 per cent, to 3,725.52 and the Nasdaq Composite dropped 61.98 points, or 0.48 per cent, to 12,837.45.

European stocks extended their year-end rally to close at a 10-month high in anticipation of fresh stimulus and as the European Union vaccination program got under way.

The pan-European STOXX 600 index rose 0.76 per cent and MSCI’s gauge of stocks across the globe gained 0.29 per cent.

Emerging market stocks rose 1.13 per cent. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 1.09 per cent higher, while Japan’s Nikkei rose 2.66 per cent.

Crude prices advanced on hopes that pandemic aid could boost demand and spur economic growth.

US crude rose 0.8 per cent to settle at $48 per barrel and Brent settled at $51.09 per barrel, up 0.45 per cent on the day.

US Treasury yields were little changed in choppy trading, and the yield curve was slightly steeper as investors awaited the Senate’s response to the higher stimulus cheque approved by the House.

Benchmark 10-year notes last fell 1/32 in price to yield 0.9347 per cent, from 0.933 per cent late on Monday.

The 30-year bond last fell 3/32 in price to yield 1.673 per cent, from 1.669 per cent late on Monday.

The dollar dipped to a two-year low against the euro and riskier currencies gained ground on the Brexit trade deal and prospects of increased fiscal aid.

The dollar index fell 0.38 per cent, with the euro up 0.29 per cent to $1.225.

The Japanese yen strengthened 0.26 per cent versus the greenback at 103.54 per dollar, while Sterling was last trading at $1.3493, up 0.33 per cent on the day.

Gold prices advanced as the dropping dollar bolstered the safe-haven metal’s appeal ahead of the Senate’s vote on heftier stimulus payments.

Spot gold added 0.4 per cent to $1,877.76 an ounce.