Hints by the Federal Reserve last week that it has finished with its rate hiking has sparked a rally across global markets
Hints by the Federal Reserve last week that it has finished with its rate hiking has sparked a rally across global markets AFP News

A rally in stock markets on hopes that interest rates have peaked lost some ground Monday, as traders focused on concerns over weak economic data and conflict in the Middle East.

Wall Street indices ended mostly higher, with the blue-chip Dow Jones Industrial Average edging up 0.1 percent.

Eurozone markets, however, slumped after underwhelming business survey data.

"After their exuberant performance last week, stocks have seen a quieter session, with some profit-taking in Europe and Wall Street eking out only small gains," said Chris Beauchamp, chief market analyst at online trading platform IG.

"Last week's action-packed sessions saw a step-change in the outlook for global central bank policy, convincing investors that the period of steady rate increases is behind us," he added.

After a tough year for traders, the US Federal Reserve's decision last week to halt monetary policy tightening for a second meeting -- and hint that it would not tighten further -- provided some much-needed vigor, and sparked talk of a new year cut.

Those hopes were given a boost Friday by US figures showing far fewer jobs than expected were created in October, while other data pointed to a slowing economy. These ease pressure on policymakers to lift rates further.

All three main indices on Wall Street jumped Friday after the jobs reading, which also fueled bets on an interest rate cut by June.

Treasury yields eased back from 16-year highs, though they moved up on Monday.

"We just had the biggest week of the year and it's perfectly normal and healthy to see the market pause and digest that big run," said Adam Sarhan of 50 Park Investments.

While US economic data has been reassuring, the same cannot be said for Europe, with the latest eurozone business survey coming in at a nearly three-year low.

"It seems like sentiment has definitely been impacted by disappointing PMIs from European economies, which came in below expectations in Italy and France," XTB analyst Walid Koudmani told AFP.

"Furthermore, the geopolitical situation continues to be troubling... in the Middle East conflict," he said.

Israeli forces pushed on with intense strikes targeting Palestinian militants in Gaza on Monday as the war neared the one-month mark and the Hamas-run health ministry's death toll exceeded 10,000 for those inside the besieged territory.

Determined to destroy Hamas, whose October 7 attack left 1,400 dead in Israel and saw over 240 hostages taken, Israeli Prime Minister Benjamin Netanyahu has vowed not to let up despite mounting international calls for a ceasefire.

Oil prices ticked higher after key producers Saudi Arabia and Russia said they would stick to their output curbs until the end of the year.

The news came after oil fell more than six percent last week as investors grew optimistic that the Israel-Hamas conflict would not spill over into a wider war in the crude-rich Middle East.

New York - Dow: UP 0.1 percent at 34,095.86 (close)

New York - S&P 500: UP 0.2 percent at 4,365.98 (close)

New York - Nasdaq: UP 0.3 percent at 13,518.78 (close)

London - FTSE 100: FLAT at 7,417.76 (close)

Frankfurt - DAX: DOWN 0.4 percent at 15,135.97 (close)

Paris - CAC 40: DOWN 0.5 percent at 7,013.73 (close)

EURO STOXX 50: DOWN 0.4 percent at 4,158.64 (close)

Tokyo - Nikkei 225: UP 2.4 percent at 32,708.48 (close)

Hong Kong - Hang Seng Index: UP 1.7 percent at 17,966.59 (close)

Shanghai - Composite: UP 0.9 percent at 3,058.41 (close)

Euro/dollar: DOWN at $1.0723 from $1.0731 on Friday

Pound/dollar: DOWN at $1.2342 from $1.2380

Dollar/yen: UP at 150.00 yen from 149.39 yen

Brent North Sea crude: UP 0.3 percent at $85.18 per barrel

West Texas Intermediate: UP 0.4 percent at $80.82 per barrel