Stocks recovered early losses, while Treasuries gave up their gains amid signs that Russia’s response to Turkey’s downing of a warplane near its border with Syria won’t include the military.
The Standard & Poor’s 500 Index closed up 0.1 percent near its highest level since Nov. 6 after Russian President Vladimir Putin stopped short of threatening a military response to the incident. European stocks slipped as the first clash of foreign powers embroiled in the Syrian civil war sparked concern tensions will escalate. Gold gained for the first time in three sessions, as oil rallied with copper following a base metals rout. The dollar retreated.
Financial-market moves in response to the downed warplane were contained as political analysts in Russia and Europe said a major escalation seems unlikely given the risks associated with any conflict between Russia and a NATO member. The incident comes as Brussels remains on the highest-level terror alert amid what officials have called credible terrorist threats and after the U.S. State Department issued a global alert for Americans.
The geopolitical tensions somewhat overshadowed U.S. data Tuesday that indicated the economy expanded at a faster pace in the third quarter than previously reported, fueling bets that the Federal Reserve will raise key interest rates next month. Treasuries pared gains as the odds for an increase at the Fed’s December meeting rose to 74 percent.
The S&P 500 rose to 2,089.14 by 4 p.m. in New York, after falling as much as 0.8 percent earlier in the session. The index is coming off its best week of 2015 and has rallied 12 percent from its August low, though gains have stalled about 2 percent from the May record.