European markets ended higher on Monday after an uncertain start to the new trading week as investors reassessed the economic outlook.
The pan-European Stoxx 600 ended 0.5% higher, with technology stocks up 2.2% while insurance stocks fell 0.5%.
Global markets have weighed the possibility that the Federal Reserve is preparing to slow the pace of its anti-inflationary rate hikes after economic data last week showed a fall in wholesale prices and retail sales.
On Friday, Fed Governor Christopher Waller said he only supports a quarter-point hike on Feb. 1 when the central bank releases its next rate policy update. Waller also said interest rates are already high enough to slow the economy.
Kristalina Georgieva, executive director of the IMF, told the World Economic Forum on Friday that the outlook for the global economy is not as bad as feared a few months ago – “but less bad doesn’t mean quite good.”
“We have to be careful,” she said at a final panel moderated by CNBC at the World Economic Forum in Davos.
The Dow opened higher Monday as investors weighed a potential Federal Reserve slowdown or pause and braced for a busy earnings week.
Stocks in Asia rose overnight but most markets in the region are closed for the Lunar New Year holiday, with Shanghai markets closed for the week.