Global stock markets traded mixed on Monday as rising oil prices and growing expectations of a Federal Reserve rate hike shaped investor sentiment. European shares remained subdued, while several Asian markets advanced sharply after strong gains in technology stocks.

Oil prices stayed near six-week highs as the conflict between the United States and Iran disrupted shipping and crude flows. Meanwhile, strong US employment data raised expectations that the Fed could increase interest rates at its September meeting.

European Stocks Struggle as Oil Prices Rise

The pan-European Stoxx 600 slipped almost 0.1% during morning trading. Germany’s DAX fell 0.14%, while France’s CAC 40 and Italy’s FTSE MIB each gained about 0.1%.

London’s FTSE 100 fell 0.1% to 10,824.74 points by 0927 GMT, while the FTSE 250 also declined 0.1%. Consumer-focused sectors led losses. Beverage stocks dropped 1.6%, while personal care, drug and grocery shares declined 0.8%.

Energy shares provided support as higher crude prices lifted oil companies. BP and Shell gained around 1% each. Standard Life rose 1.5% after reporting first-half profit above market expectations, while Ashmore fell 1.4% after annual profit missed forecasts.

Spire Healthcare gained around 3% after agreeing to a takeover by funds managed by Toscafund, Three Hills and Ares. The deal values its share capital at about EUR 1.03 billion.

Fed Rate-Hike Bets Rise After Strong US Jobs Report

Investors increased bets on a September Federal Reserve rate hike after US nonfarm payrolls rose by 162,000 in August. Economists had expected an increase of about 56,000 jobs. The unemployment rate remained at 4.1%.

Traders now see about a 58% chance of a Fed rate increase at the September 15-16 meeting. Expectations stood near 44% a month earlier. Investors will therefore watch US producer and consumer inflation data later this week for further direction.

Gold slipped as higher rate expectations reduced demand for non-yielding assets. Spot gold fell 0.2% to about USD 4,421 per ounce.

Ole Hansen of Saxo Bank said gold had found buying interest below USD 4,400, while resistance remained above USD 4,500. He added that stronger employment data had ‘reinforced expectations of a Fed rate hike on 16 September.’

Middle East Conflict Keeps Energy Markets in Focus

Oil prices remained elevated after further US-Iran hostilities affected vessels around the Strait of Hormuz. Iran also said it plans to announce a new restricted zone in the Gulf and provide details of a shipping corridor.

US Energy Secretary Chris Wright also raised doubts over the chances of a near-term nuclear agreement with Iran. “There may not be a nuclear agreement,” Wright said, adding that an agreement ‘may await the next administration in Iran.’

Higher energy costs have added pressure to inflation expectations across major economies. Markets are now tracking whether rising fuel prices could affect future central bank decisions.

Also Read: FTSE 100 Live: Index Opened 34 Points Lower at 10,797 Amid Subdued Investor Sentiment, Brent at USD 97.05

Asian Markets Rise While Wall Street Remains Closed

Asian markets mostly advanced on Monday. South Korea’s Kospi jumped 4.61%, while Japan’s Nikkei 225 gained 2.12%. Samsung rose 5.68%, SK Hynix climbed 8.26%, and SoftBank advanced 11.22%.

Mainland China’s CSI 300 gained 0.59%, while Australia’s S&P/ASX 200 edged 0.06% higher. Hong Kong’s Hang Seng moved in the opposite direction and fell around 0.9%.

US stock exchanges remained closed Monday for Labor Day. Regular trading will resume on Tuesday, September 8. Investors will return to markets with oil prices, Treasury yields, inflation data, and the September Fed decision in focus.