Stocks Waver As Traders Eye Rate Hikes, Ukraine

Global stocks were mixed Monday while oil prices dipped as markets mull over expected interest rate hikes and Ukraine tensions.

While US stocks flirted with positive territory, two of the three major indices ended up lower as markets await critical US consumer price data later in the week that will help determine how aggressively the Federal Reserve responds to inflation.

Earlier, European indices rebounded from Friday's losses, while Asian bourses were mixed.

"Stocks remain under pressure," said a note from US Bank Wealth Management's Terry Sandven. "Near-term, equity price stabilization is unlikely to occur until certainty around the timing and magnitude of Federal Reserve interest rate increases become better known."

A forecast-busting US jobs report Friday reinforced optimism that the world's top economy was well on the recovery track, but also ramped up expectations of an interest rate hike by the US Federal Reserve in March.

It comes as surging global inflation resulted in the Bank of England last week hiking its main interest rate for the second meeting in a row, while the European Central Bank signaled for the first time that it may raise borrowing costs this year.

"Volatility is likely to remain as the global markets adjust to the prospect of tighter monetary policies, as well as geopolitical tensions between Russia and Ukraine, and a mixed (fourth quarter) earnings season, which will continue to roll on this week," investment bank Charles Schwab said in a note.

On the geopolitical front, investors are nervous over Western fears that Russia plans to invade Ukraine.

French President Emmanuel Macron met with Russian leader Vladimir Putin in Moscow, while US President Joe Biden met with Germany's Chancellor Olaf Scholz on the impasse in Eastern Europe.

Traders are also watching for more corporate earnings statements this week after a disappointing report from Facebook parent Meta last week caused the company's shares to sink.

This week's earnings calendar includes results from Pfizer, Disney and Coca-Cola.

Elsewhere Monday, oil prices continued their retreat after European benchmark contract, Brent North Sea crude, hit $94 a barrel -- the highest level for more than seven years.

"Oil prices are a little flat at the start of the week with the rally losing a little momentum after nuclear talks between the US and Iran appeared to make positive progress," Erlam said.

But the continued reopening of the world economy as well as a cold snap in the United States and uncertainty over the Russia-Ukraine standoff are expected to keep crude futures well supported, according to analysts.