Stock markets eased back yesterday as China-US trade talks were jolted by a US law backing Hong Kong protests that has angered Beijing.

US President Donald Trump signed into law a bi-partisan bill that voiced support for the pro-democracy protests, prompting a sharp response from Chinese officials.

That tempered enthusiasm for equities that have been on a roll – with Wall Street hitting multiple records – owing to expectations that the closely followed trade negotiations would lead to a partial pact soon.

The dollar dropped in value against other major currencies, and oil prices were lower as well.

In New York, the stock market was closed for Thanksgiving Day.

On Wednesday, Trump put his name to the Hong Kong Human Rights and Democracy Act, which requires the president to annually review the Chinese city’s favourable trade status and threatens to revoke it if democratic freedoms there are quashed.

Trump also agreed to legislation banning sales of tear gas, rubber bullets and other equipment used by Hong Kong security forces to put down protests that have wracked the city since June, battering its economy.

Worries about the trade talks also weighed on oil prices, with traders concerned that a prolonged China-US trade war would hit long-term demand.