Most stock markets bounced on Monday on hopes of US interest rate cuts after weak jobs figures raised concerns about the world's top economy.
The broad gains followed a sell-off on Wall Street Friday in reaction to the jobs data and news that dozens of countries would be hit with US tariffs ranging from 10 to 41 percent.
Wall Street's main indices jumped higher at the opening bell, with the Dow climbing 0.6 percent.
European indices mostly started the week on the front foot, with Paris gaining 1.0 percent and Frankfurt rising 1.3 percent.
“Investors seem to be taking an optimistic view… betting on an increased likelihood of further monetary easing by the Fed after Friday's employment figures,” said John Plassard, head of investment strategy at Cite Gestion Private Bank.
CME's FedWatch tool has investors seeing an 87.5 percent of the Fed making a quarter point cut in interest rates.
He noted, however, that “uncertainty reigns” as US President Donald Trump's tariffs are set to take effect on Thursday.
Switzerland's stock market dropped around two percent at Monday's open, its first session as it returned from a holiday after a tough 39-percent US tariff rate was announced.
The index pared most of its losses in early afternoon trading, with hopes the Swiss government, which announced it would make an improved offer to Washington, can negotiate a reduction in the levy, which is steeper than that imposed on the European Union and Britain.
London advanced, lifted by banking stocks after the sector was granted reprieve from the worst of feared compensation claims over controversial car loans dating back to 2007.
Lloyds Banking Group rose eight percent, while Close Brothers, listed on the FTSE 250, soared more than 20 percent.
Asian investors started the week mixed, with Hong Kong and Shanghai advancing while Tokyo fell.
Stocks had struggled Friday as US jobs growth missed expectation in July, with revised data showing the weakest hiring since the Covid-19 pandemic — fuelling concerns that Trump's tariffs are starting to bite.
The president responded to the data by firing the commissioner of labour statistics, accusing her of manipulating employment data for political reasons.
Markets reacted more favourably on Monday, as the slowdown boosted hopes of Fed rate cuts to support the economy.
“Analysts are betting that rate-setters will prioritise recession avoidance over price controls,” said Derren Nathan, head of equity research at Hargreaves Lansdown.
