Stock prices diverge as focus turns to US inflation data

Stock markets around the world diverged on Monday as investors sought to put the turmoil fueled by U.S. recession fears behind them and instead focused on U.S. inflation figures and other key data due this week.

After a painful drop in stock prices a week ago, triggered by a major failure in job creation in the US, stock prices recovered and ended Friday on a healthy note.

These price increases were boosted by a report showing that fewer people than expected applied for unemployment benefits in the US, easing fears that the world's largest economy was heading for a recession.

The recovery continued into the new week, while the dollar delivered mixed numbers against its major rivals.

“Sentiment continues to stabilise after a week's sell-off as concerns about a recession in America ease somewhat,” noted Susannah Streeter, head of money and markets at Hargreaves Lansdown.

“The latest inflation data in the US will be in focus this week,” she added.

The data could lead to new volatility.

“There is a feeling that any number outside of expectations could be the trigger for an excessive move, in one direction or the other,” said Trade Nation analyst David Morrison.

“It is important to remember that US Treasuries remain in demand, suggesting that investors are reluctant to take on too much additional equity exposure,” he added.

Traders are looking for clues about the number of likely U.S. interest rate cuts this year amid easing inflation.

The bank is expected to cut borrowing costs by 25 basis points next month and at least once more before January as a series of data suggests price increases have been brought under control.

Elsewhere, the yen weakened against the dollar after last week's fluctuations.

Oil prices rose due to supply risks resulting from a possible escalation of the conflict in the Middle East and escalating tensions in the camp of major crude oil producer Russia.

The White House warned on Monday that a “significant series of attacks” by Iran and its proxies against Israel could occur this week following the assassinations of senior Hezbollah and Hamas leaders in late July.

In Russia, further evacuations were ordered in two regions bordering Ukraine as Moscow struggled to contain an unprecedented advance into its territory.

– Key figures around 2025 GMT –

New York – Dow: Minus 0.4 percent to 39,357.01 points (closing price)

New York – S&P 500: Flat at 5,344.39 (closing price)

New York – Nasdaq Composite: Plus 0.2 percent to 16,780.61 (closing price)

London – FTSE 100: Plus 0.5 percent to 8,210.25 (closing price)

Paris – CAC 40: 0.3 minus to 7,250.67 (closing price)

The story continues

Frankfurt – DAX: Flat at 17,726.47 (closing price)

EURO STOXX 50: 0.1 percent less to 4,671.88 (closing price)

Hong Kong – Hang Seng Index: Increase of 0.1 percent to 17,111.65 (closing price)

Shanghai – Composite: 0.1 percent down to 2,858.20 (closing price)

Tokyo – Nikkei 225: Closed due to holiday

Euro/Dollar: Rise to 1.0931 USD from 1.0921 USD on Friday

Pound/Dollar: Up to $1.2766 from $1.2760

Dollar/Yen: Rise to 147.26 yen from 146.63 yen

Euro/pound: Rise to 85.61 at 85.57 pence

North Sea Brent oil: Increase of 3.3 percent to USD 82.30 per barrel

West Texas Intermediate: Up 4.2 percent to USD 80.06 per barrel

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