USA and euro zone government bond yields rose as the trade deal marks a major step in ending a dispute that has cut global growth and boosted demand for such safe-haven assets as bonds, gold and currencies like the Japanese yen and Swiss franc.
Apple, Facebook Inc, Netflix Inc, Microsoft Corp and Amazon.com Inc, which have powered the longest bull run in U.S. equities, were among the top contributors to record high closes for the S&P 500 and Nasdaq.
The Dow Jones Industrial Average .DJI fell 37.87 points, or 0.13%, at the open to 28,901.80. -China trade deal as well as the start of the fourth-quarter corporate earnings season.
Goldman Sachs gained 1.2%, and Cisco Systems rose 0.7%, to lead the Dow higher.
With the S&P 500 at record levels, equivalent to around 18 times expected earnings, algorithmic traders and human investors interpreted the Bloomberg report as a reason to sell, said Joe Saluzzi, co-manager of Themis Trading, in Chatham, New Jersey.
Investors are waiting for corporate results that start in earnest this week with large USA banks, including Citigroup Inc, JPMorgan Chase & Co and Wells Fargo & Co, due to report on Tuesday. Earlier, technology shares sent the S&P 500 and Nasdaq Composite Index to records.
Investors' "unquenchable appetite for stocks is in hyperdrive" thanks to the thawing tensions between the USA and both China and Iran, Stephen Innes, chief Asia market strategist at AxiTrader, said in a report. The document listed no major US trading partner among the 20 economies it monitors for potential manipulation.
The market's late-afternoon burst of selling came a day before the United States and China were due to sign a preliminary trade agreement in Washington. The pickup in yields helped lift financial stocks, as it makes it possible for banks to charge higher interest rates on mortgages and other consumer loans.
Mnuchin said that was because the trade agreement contains a "fully enforceable" chapter on currency policy. The earnings handily beat analysts' forecasts.
The yield on 10-year Treasuries rose one basis point to 1.85%.Australian 10-year yields rose about four basis points to 1.25%.
Delta Air Lines rose 3.3% after the company increased its fourth-quarter profit to $1.1 billion by adding more flights over the holiday period and packing them even more full of passengers.
Wall Street expects corporate profits for S&P 500 companies in the last three months of 2019 to be down by 2 percent. The stock broke above $500 for the first time ever in early trading.
Benchmark crude oil fell 96 cents to settle at $58.08 a barrel.
Gold fell 0.5% to $1539.64.West Texas Intermediate crude rose 0.1% to $58.10 a barrel. It gained 29 cents on Tuesday to $64.49 a barrel.
The dollar rose to 109.93 Japanese yen from 109.54 yen on Friday.
US gold futures settled down 0.6% at $1,550.60 an ounce. The euro was flat at $1.1128.