US STOCKS-Wall St muted as investors track progress of US-China trade talks

By Kanchana Chakravarty and Sukriti Gupta

June 10 (Reuters) - Wall Street's main indexes were subdued in volatile trading on Tuesday as investors awaited a breakthrough in the ongoing U.S.-China trade talks aimed at defusing a tariff dispute that has roiled global markets this year.

Investors hoped for improved ties after relief from a preliminary deal struck last month was overshadowed by Washington's allegations that Beijing was blocking exports of rare earth minerals critical to the aerospace, semiconductor and defense sectors.

"Markets are taking a more upbeat tone on hints that we are starting to see some signs of progress," said Laura Cooper, head of macro credit and investment strategist at Nuveen.

"This is just going to underpin more choppy price action because there's a lack of clarity on what an actual deal could be."

At 11:39 a.m. ET the Dow Jones Industrial Average .DJI rose 6.91 points, or 0.02%, to 42,768.67, the S&P 500 .SPX gained 5.96 points, or 0.10%, to 6,011.84 and the Nasdaq Composite .IXIC lost 8.49 points, or 0.04%, to 19,582.75.

Seven of the 11 major S&P 500 sub-sectors rose, led by a 1.9% gain in energy .SPNY, tracking strength in oil prices. Communication services .SPLRCL stocks added 0.8%.

U.S. equities rallied sharply in May, with the S&P 500 index and the tech-heavy Nasdaq marking their best monthly gains since November 2023, helped by upbeat earnings reports and a softening in President Donald Trump's harsh trade stance.

The S&P 500 is about 2% below all-time highs touched in February, while the Nasdaq is about 2.6% away from the record peaks it reached in December.

Investors are awaiting U.S. consumer prices data on Wednesday for clues on the Federal Reserve's rate trajectory.

The World Bank slashed its global growth forecast for 2025 by 0.4 percentage point to 2.3%, saying higher tariffs and heightened uncertainty posed a "significant headwind" for nearly all economies.

Most megacap and growth stocks were mixed. Tesla TSLA.O shares advanced 3.6%.

Insmed shares INSM.O jumped 27% after the drugmaker said its experimental drug significantly reduced blood pressure in the lungs and improved exercise capacity in patients in a mid-stage study.

Jif peanut butter maker J.M. Smucker's SJM.N shares were set for their worst day on record after it forecast annual profit below estimates. The company's shares were last down 12.3%.

Advancing issues outnumbered decliners by a 1.91-to-1 ratio on the NYSE and by a 1.47-to-1 ratio on the Nasdaq.

The S&P 500 posted eight new 52-week highs and two new lows, while the Nasdaq Composite recorded 59 new highs and 35 new lows.