Volkswacht Bodensee - US diverges from global stock rally as investors focus on inflation

Wall Street's early enthusiasm faded by the close, with the broad S&P 500 dipping 0.1 percent, as inflation data coming this week combined with the strong jobs report Friday are boosting the view the US Federal Reserve will announce a third successive rate increase of three-quarters of a percentage point in September.

"With persistent inflation and a strong labor market, the Fed is on a clear path to raise rates," OANDA analyst Edward Moya said. "This week is all about inflation."

Data due Wednesday are expected to show inflation in the world's biggest economy slowed slightly in July, but remained close to the 40-year highs seen in recent months. The June report showed consumer prices soared 9.1 percent over the past 12 months.

However, even if the pace slows, SPI Asset Management analyst Stephen Innes said the reading "seems very unlikely to offer compelling evidence of a slowdown needed for the Fed to pull away from its aggressive inflation-fighting mode."

Global stocks had rallied over the past several sessions after another negative US GDP report convinced some traders the Fed might be able to ease up on the aggressive inflation-fighting campaign.

But central bankers in recent days have tried to deflate their enthusiasm, saying more rate hikes are coming.

Oil prices gained, making good some of the losses from last week, when a rise in US crude stockpiles was partly responsible for a 10-percent drop in prices.

Both main oil contracts have lost all the gains seen in the wake of Russia's invasion of Ukraine, which led the United States and Europe to ban imports of Russian crude, hammering already thin supplies.

- Key figures at around 2045 GMT -

New York - Dow: UP 0.1 percent at 32,832.54 (close)

New York - S&P 500: DOWN 0.1 percent at 4,140.06 (close)

New York - Nasdaq: DOWN 0.1 percent at 12,644.46 (close)

London - FTSE 100: UP 0.6 percent at 7,482.37 (close)

Frankfurt - DAX: UP 0.8 percent at 13,687.69 (close)

Paris - CAC 40: UP 0.8 percent at 6,524.44 (close)

EURO STOXX 50: UP 0.9 percent at 3,757.90

Tokyo - Nikkei 225: UP 0.3 percent at 28,249.24 (close)

Hong Kong - Hang Seng Index: DOWN 0.8 percent at 20,045.77 (close)

Shanghai - Composite: UP 0.3 percent at 3,236.93 (close)

Euro/dollar: UP at $1.0194 from $1.0184 Friday

Pound/dollar: UP at $1.2079 from $1.2075

Euro/pound: UP at 84.35 pence from 84.32 pence

Dollar/yen: DOWN at 134.98 yen from 135.00 yen

West Texas Intermediate: UP 1.5 percent at $90.32 per barrel

Brent North Sea crude: UP 1.3 percent at $96.18 per barrel

R.Adler--BTB