US stocks are down for the fifth straight day, with the Dow Jones Industrial Average falling more than 5 percent.
The S&P 500 index closed down 0.6 percent.
Trump has threatened to scrap US oil production if the US fails to meet a deadline to slash emissions.
He has also suggested cutting coal production, which could cause more emissions and harm the environment.
The Dow Jones was up nearly 1 percent in early trading, while the S&P 500 was up 1.2 percent.
It was the first time in more than two months that the S, P and Nasdaq had all gained in the same day.
“We’re very close to a very, very tight market,” said Stephen C. Gertz, an analyst at Renaissance Capital in New York.
The dollar strengthened against other major currencies as the rally in global stock markets, led by the Dow, was muted.
The S&P, +0.30% index of broad-based companies jumped 6.2%, while the Nasdaq Composite was up 6.3%.
It was a far cry from the gains seen in recent weeks, when the Dow soared to an all-time high of 20,084, and the Nasblextended index jumped nearly 10%.
“We are starting to see a more bullish outlook than what we saw last week,” said Mark S. Shostak, an investment manager at J.P. Morgan Securities LLC in New Jersey.
“We are just starting to get a handle on this.”
The US has been experiencing a weak start to the year, but recent gains have slowed as investors have priced in the possibility of a potential trade war with China.
The Trump administration has imposed tariffs on Chinese goods and services, including steel, and imposed trade barriers on imports of oil and other goods.
The Chinese government has also been taking steps to limit the growth of the country’s population, which has surged as the population has soared, to try to maintain stability.
The US and China have had their worst trade war since the 1980s, when U.S. tariffs and trade restrictions on China crippled the economy.
China is also facing an economy slowdown in which some companies are cutting back on investments and laying off workers.