San Francisco Frontiers - Oil prices retreat as markets welcome US-Iran talks

Global stocks were mixed, with the Nasdaq rising to a second straight record while the Dow retreated following a muted performance on European bourses.

Trump told the UN that he faced a "big decision" on whether to make a deal with Iran or "annihilate the Islamic Republic and do it quickly."

But just hours later, Trump revealed that Iranian and US representatives had met for "very good" talks on the sidelines of the UN gathering.

The meeting lasted three hours and included Trump's business friend-turned roving global negotiator Steve Witkoff and son-in-law Jared Kushner, he said.

"They had a very good meeting, a very productive meeting -- they have another one scheduled in the very near future," Trump told reporters as he met Ukrainian President Volodymyr Zelensky.

Oil prices spent parts of the session sharply lower before cutting losses after Trump's UN speech. The major contracts finished the day down a little more than one percent after Trump disclosed the direct talks.

The market is "paying attention to the headlines, certainly," Briefing.com analyst Patrick O'Hare said of the US-Iran dynamics.

"Maybe there's an idea that they can work something out that just sort of kind of holds the line, at least for the time being and reduces the prospect of military action."

Stocks had risen in Asia as enthusiasm poured back into the technology sector after Facebook owner Meta's free AI agent Muse topped the download charts following its release this month.

"If there is widespread adoption of Muse, it could add to demand for other AI tools, which could lift the AI sector, after a rough few months," said Kathleen Brooks, research director at trading group XTB.

Meta said Muse, which can book travel, send emails and make purchases, was built for people with no technical background and is designed to work the way people already message each other.

Shares of Meta, which rose more than 11 percent on Monday, fell 0.6 percent Tuesday.

But leading semiconductor producers such as Nvidia, AMD and Micron advanced, helping the Nasdaq score a 0.5 percent gain to finish at a record.

- US-China hopes -

Traders are also looking to Washington ahead of a summit on Thursday between Trump and China's President Xi Jinping that is expected to focus on trade between the world's two biggest economies.

A simmering US-China trade war is a key concern, as both sides have maintained a tariff truce for nearly a year but have yet to secure a lasting agreement.

US and Chinese economic officials met in New York on Sunday for talks on trade and artificial intelligence to lay the groundwork for the summit.

China's top trade negotiator He Lifeng and US Treasury Secretary Scott Bessent discussed creating a communication channel for AI concerns, with warnings of an AI apocalypse hanging heavy as both countries race for technological supremacy.

"The big question is what's going to happen when the current one-year trade truce expires in November, and whilst the general tone remains positive, there still isn't an agreement yet," said Deutsche Bank's Jim Reid.

AI's growing role in society and its threat to jobs and cybersecurity is a major topic at the UN General Assembly, where leaders are expected to discuss an international framework -- though Trump has slammed calls to slow the technology's development.

- Key figures at around 2020 GMT -

Brent North Sea Crude: DOWN 1.1 percent at $99.25 per barrel

West Texas Intermediate: DOWN 1.2 percent at $94.59 per barrel

New York - Dow: DOWN 0.4 percent at 51,863.69 (close)

New York - S&P 500: FLAT at 7,764.64 (close)

New York - Nasdaq Composite: UP 0.5 percent at 27,244.28 (close)

London - FTSE 100: DOWN 0.3 percent at 10,708.33 (close)

Paris - CAC 40: UP 0.2 percent at 8,154.91 (close)

Frankfurt - DAX: FLAT at 25,578.85 (close)

Hong Kong - Hang Seng Index: UP 0.2 percent at 25,087.75 (close)

Shanghai - Composite: FLAT at 3,952.13 (close)

Tokyo - Nikkei 225: Closed for a holiday

Euro/dollar: DOWN at $1.1451 from $1.1486 on Monday

Pound/dollar: DOWN $1.3344 from $1.3395

Euro/pound: UP 85.81 pence from 85.74 pence

Dollar/yen: UP 157.37 from 156.88 yen

Q.Nelson--SFF