World Markets Unsettled Amid Middle East Tensions and Anticipated US Rate Cuts

Global stock markets showed cautious movement on Monday amid rising oil prices due to Middle East tensions and the anticipation of U.S. interest rate cuts. The U.S. and European economic outlooks diverged, leading to mixed performances in government bond yields. Investors turn their eyes to Nvidia's upcoming earnings report and key inflation data.

World stock markets exhibited caution on Monday, influenced by rising oil prices amidst escalating Middle East tensions and expectations of imminent U.S. interest rate cuts. U.S. stock futures were slightly up, while European shares saw minor declines, with trading subdued due to the UK public holiday.

Following Sunday's rocket salvos and airstrikes between Israel and Hezbollah, there are concerns of potential oil supply disruptions. This has led to a 1.5% rise in Brent and U.S. crude prices, reflecting investor unease.

In his Jackson Hole symposium speech, Federal Reserve Chairman Jerome Powell suggested easing monetary policy while emphasizing the need to prevent further labor market weakening. European Central Bank's chief economist expressed cautious optimism about meeting the eurozone's inflation targets.

Germany's business morale fell for the third consecutive month, pushing back recovery hopes for its economy.

European bonds saw yields rise, in contrast to a dip in U.S. Treasury yields. Nvidia's earnings report and U.S. core inflation data are key events eyed by investors this week.

(With inputs from agencies.)