By Anna Hirtenstein

U.S. stocks wavered between small gains and losses Tuesday ahead of the release of manufacturing data that is likely to provide insight into the pace of the economic recovery.

The S&P 500 traded 0.1% higher, opening September with slight gains after its best August since 1986. The Nasdaq Composite rose 0.5% after the technology-heavy index previously closed at an all-time high. The Dow Jones industrials fell 0.1%.

The results of a private survey of purchasing managers in the U.S., due out at 10 a.m. ET, are likely to offer fresh insights into the recovery of the manufacturing sector in August. Data out from parts of Asia and Europe showed that factories are slowly recovering from the sharp output cuts that accompanied coronavirus lockdowns, but have continued to pare jobs in the face of an uncertain outlook.

"The continuation of this recovery is being priced in already," said Esty Dwek, head of global market strategy at Natixis Investment Managers. "As long as it keeps going, I think markets can continue advancing."

Zoom Video Communications jumped 37% in early trading after the video-chatting software developer raised its outlook for the year for the second time in recent months.

Manufacturing activity in Europe also showed some signs of improvement. Germany, Europe's industrial powerhouse, recorded a stronger recovery, with the purchasing managers index rising to the highest level in almost two years. But even with a revival in previously weak export orders, manufacturers reported that they were cutting jobs.

The pan-continental Stoxx Europe 600 was down 0.8%.

A private gauge of China's manufacturing activity for last month rose to its highest level in nearly a decade, supported by strong domestic and external demand and faster production activity. It marked the fourth consecutive month that the Caixin China purchasing managers index held above 50, the mark separating contraction from expansion. The Shanghai Composite Index ended the day up 0.4%.

Elsewhere in Asia, major stock benchmarks ended the day with a mixed picture. Japan's Nikkei 225 and Hong Kong's Hang Seng Index were largely flat. South Korea's Kospi index rose 1% after the government proposed an increase of 8.5% to its national budget for next year.

The dollar continued to weaken amid expectations that U.S. interest rates will remain low for an extended period. Federal Reserve official Richard Clarida's comments Monday that employing yield curve control was a future possibility, and that a low unemployment rate won't be a sufficient trigger to raise interest rates, also weighed on the currency.

The WSJ Dollar index, which measures the currency against a basket of others, dropped 0.2%.

The British pound strengthened 0.5% against the dollar, in part because of economic data showing improved manufacturing activity and a rise in consumer borrowing in the U.K. The greenback's decline was also a factor, investors said.

"While confidence can be taken from the rapid recovery in the manufacturing sector, it's all about dollar weakness currently and this will be the driving factor for a further rally," said Sam Cooper, a vice president of market risk solutions at SVB Financial Group.

In bond markets, the yield on 10-year Treasurys ticked up to 0.72%, from 0.695% on Monday.

Gold rose 0.6% to $1,989.80 a troy ounce. Its gains were partly due to the weaker dollar as the precious metal is priced in the greenback, according to Stephane Monier, chief investment officer at Lombard Odier.

"The price of gold is also to a large extent a sign of confidence of investors into the financial systems," he said. "Some people are worried that central banks are printing a lot of money and want a refuge."

Lombard Odier, a Swiss private banking group, has added gold to its strategic asset allocation over the summer. The metal currently makes up 3% of holdings across client portfolios, Mr. Monier said.

Copper for delivery in three months rose 1.9% on the back of China's manufacturing report. Traders are expecting a rise in demand for the industrial metal going forward, according to Deutsche Bank analysts.

Write to Anna Hirtenstein at anna.hirtenstein@wsj.com