After last week’s turmoil, global markets are making a positive start to this one, CNN reports.
Most major European and Asian stock indexes rose Monday, with London, Paris and Frankfurt all gaining more than 1% in early trading. Shanghai closed up 0.8%.
But some markets still struggled to shrug off last week’s gloom. Hong Kong’s Hang Seng index slipped 0.2% and the benchmark Australian index lost 0.3%.
Last week was rough for stock investors around the world.
Major indexes in Asia took especially heavy hits, with Hong Kong and Shanghai plunging nearly 10% over five days of rocky trading.
The losses in Europe were similar to those in the U.S. where the Dow and the S&P sank about 5%, marking their worst weekly decline since 2016.
Although the steep drops and volatile trading evoked memories of the scary days of the financial crisis in 2008, the market and economy are now in vastly better shape. Unemployment is at its lowest level in 17 years, and the banking system has mostly healed.
But a recent piece of good economic news — a pickup in wage growth in the U.S. — has unsettled investors, raising questions about what the U.S. Federal Reserve will do next.
If inflation accelerates, driven in part by higher wages, the Fed could raise interest rates more often and more steeply than previously anticipated. Higher rates would increase the cost of borrowing, potentially eating into companies’ profits and making their stock less attractive.
But some analysts say the worries are overdone, suggesting the strong economy means the stock market will eventually bounce back from its recent slump.