Oil prices had earlier risen after Trump ramped up threats towards Iran, a large crude producer, but Iranian Foreign Minister Abbas Araghchi "a new window of opportunity has opened".

"We are hopeful that negotiation will lead to a sustainable and negotiated solution," he said, though he said "Iran remains fully prepared to defend itself against any threat or act of aggression".

West Texas Intermediate was down 0.2 percent at $62.75 per barrel after earlier jumping 1.5 percent, while international benchmark Brent North Sea Crude slipped 1.4 percent to $67.64.

"There's speculation that Iran could agree to dilute its most highly enriched uranium in exchange for the full lifting of financial sanctions, but it's not clear if that will be enough to seal a deal between the two parties," said Aarin Chiekrie, analyst at Hargreaves Lansdown.

Wall Street was off in early trading with the tech-heavy Nasdaq giving up one percent and the Dow sliding around 0.3 percent and the broader-based S&P 500 was off 0.2 percent.

"Insurance brokers, wealth advisors, real estate services, and logistics were all in the firing line last week, and investors are cautiously watching for what slice of the market could be next on the AI hit list," Chiekrie added.

European stocks steadied in early afternoon deals after Tokyo closed lower, with Chinese markets again shut for the Lunar New Year.

In foreign exchange, the dollar rose against the British pound as official data showed UK unemployment rising to a five-year high.

Analysts said the reading of 5.2 percent for the final quarter of last year increased the likelihood of the Bank of England cutting its benchmark interest rate next month.

The greenback was also higher versus the euro but fell against the yen.

Europe's biggest economy Germany is unlikely to rebound in 2026 as geopolitical uncertainty, high costs and weak domestic demand weigh on growth, the country's Chamber of Industry and Commerce said Tuesday.

Germany returned to weak growth in 2025 after two years of recession.

- Key figures at around 1445 GMT -

New York - Dow: DOWN 0.3 percent at 49,366.16 points

New York - S&P 500: DOWN 0.2 percent at 6,820.63

New York - Nasdaq: DOWN 1.0 percent at 22,486.46.

London - FTSE 100: UP 0.4 percent at 10,517.01

Paris - CAC 40: UP 0.3 percent at 8,343.55

Frankfurt - DAX: UP 0.4 percent at 24,897.35

Tokyo - Nikkei 225: DOWN 0.4 percent at 56,566.49 (close)

Hong Kong - Hang Seng Index: closed for holiday

Shanghai - Composite: closed for holiday

Euro/dollar: DOWN at $1.1820 from $1.1854 on Monday

Pound/dollar: DOWN at $1.3526 from $1.3630

Dollar/yen: DOWN at 153.40 yen from 153.48 yen

Euro/pound: UP at 87.40 pence from 86.98 pence

West Texas Intermediate: DOWN 0.2 percent at $62.75 per barrel

Brent North Sea Crude: DOWN 1.4 percent at $67.64 per barrel

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Hargreaves Lansdown

Dow

S&P Global Ratings