US stocks gain ahead of Fed meeting but Asia, Europe struggle

wall street
(File photo: Jordan News)
New York, United States — European and Asian indices fell on Monday, but Wall Street closed higher as markets worldwide brace for this week's Federal Reserve meeting, where the US central bank is set to hike rates amid worries it could spark a recession.اضافة اعلان

The positive sentiment in New York was a reversal from Friday when major US indices finished a tough April by closing sharply lower as fears of higher interest rates, supply chain snarls, and persistent inflation gripped markets.

The tech-heavy Nasdaq, having lost more than 13 percent in April for its worst monthly showing in 14 years, won the most in Monday's session with a 1.6 percent gain, while the Dow and S&P 500 increased more modestly.

Eurozone markets ended the session down, with Paris losing 1.6 percent and Frankfurt tumbling 1.2 percent. London was closed for a bank holiday.

Tokyo, Seoul, Mumbai, Manila, Sydney, and Wellington all finished lower. Hong Kong and mainland Chinese markets were closed, along with several other Asian markets.

"The markets remain skittish regarding an expected aggressive Fed monetary policy tightening cycle as the central bank is set to hike rates this week," analysts at Charles Schwab investment bank said.

"Moreover, global sentiment continues to be hampered by the ongoing war in Ukraine, the recent spike in interest rates, the rallying US dollar, and slowing economic activity in China," they said.

Data released over the weekend showed Chinese manufacturing activity shrank last month at its fastest pace since the start of the pandemic as the government applies Covid-19 lockdowns in the biggest cities of the world's second-biggest economy.

The shockwaves were being felt in the United States, where an industry survey said factory activity slowed last month, with some firms blaming the restrictions in China.

While economic hub Shanghai remains locked down, Beijing has tightened virus controls in the capital, requiring clear Covid tests to visit public spaces.

This followed gloomy economic data in Europe on Friday showing that Russia's invasion of Ukraine weighed on growth.

The struggles in China, the world's biggest crude importer, led to an early drop in commodity prices on demand concerns, offsetting worries about tighter supply as the EU eyes a ban on Russian oil over its invasion of Ukraine. However, prices recovered later in the day.

Sources said that the European Commission is preparing a sanctions text that could be put to the 27 member states as early as Wednesday.

They added the ban would be introduced over six to eight months to give countries time to diversify their supply.

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