Investors who pushed equity prices sharply lower on Tuesday are grappling with uncertainty over whether U.S. President Donald Trump will strike a deal to avert an escalation of America's trade war with China, the U.S. Treasury secretary said on Tuesday.

"The market is trying to figure out: 'Is there going to be a real deal at the end of 90 days or not?'" Treasury Secretary Steven Mnuchin told the Wall Street Journal CEO Council, referring to a 90-day trade war ceasefire agreed by Trump and Chinese President Xi Jinping over the weekend.