New York (AFP) - Wall Street stocks surged Monday while European and Asian markets dropped as investors braced for interest rate decisions this week from major central banks, including the Federal Reserve.
The dollar generally rose against its main rivals, while oil prices rebounded following sharp falls last week.
Analysts expect the Fed and the European Central Bank to announce rate hikes at their meetings this week.
And the Bank of England is on course for a ninth straight increase as policymakers try to bring down inflation from the highest levels in decades.
"Following a softer session in Asia, European markets are on edge, opening the week lower ahead of a critical few days," said Victoria Scholar, head of investment at Interactive Investor.
"The ECB, the Fed and the Bank of England are expected to raise rates by 50 basis points each as the pace of tightening looks set to slow," Scholar added.
The half-point jumps will still be steep rises, however, as central banks struggle to cool the pace of price increases, particularly in energy and food.
London, Frankfurt and Paris all closed lower.
Wall Street stocks ended higher, as bargain hunters moved in following losses at the end of last week.
The Dow Jones Industrial Average jumped 1.6 percent and the S&P 500 closed 1.4 percent up.
Ahead of the Fed's policy meeting, investors are set to digest US inflation data due Tuesday.
"It will be a fitting hump day on Wednesday, because the (inflation) data and the Fed decision are big humps the market needs to get over if it wants to make a run at a year-end rally," said market analyst Patrick O'Hare at Briefing.com.
"If either, or both, disappoint in a meaningful way, then a year-end rally becomes a more challenging proposition."
Traders are also keeping an eye on developments in China as it moves away from a zero-Covid policy that has hammered its economy, the world's second largest after the United States.
The shift comes after widespread protests following nearly three years of strict controls.
Uncertainty surrounding the strength of China's demand recovery has hit oil prices hard, with crude futures shedding more than 10 percent last week, but they rebounded on Monday.
"The gradual easing of Chinese Covid restrictions is...expected to lead to a further upswing in demand," said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
But investors are wary of whether the relaxation of restrictions will lead to a swift rebound as Covid cases are expected to jump.
"The recent volatility in crude oil highlights the ongoing questions over whether the Chinese economy is truly ready to return or on the cusp of yet another series of restrictions," said Joshua Mahony, senior market analyst at online trading platform IG.
Key figures around 2140 GMT
New York - Dow: UP 1.6 percent at 34,005.04 (close)
New York - S&P 500: UP 1.4 percent at 3,990.56 (close)
New York - Nasdaq: UP 1.3 percent at 11,143.74 (close)
EURO STOXX 50: DOWN 0.5 percent at 3,921.82 (close)
London - FTSE 100: DOWN 0.4 percent at 7,445.97 (close)
Frankfurt - DAX: DOWN 0.5 percent at 14,306.63 (close)
Paris - CAC 40: DOWN 0.4 percent at 6,650.55 (close)
Tokyo - Nikkei 225: DOWN 0.2 percent at 27,842.33 (close)
Hong Kong - Hang Seng Index: DOWN 2.2 percent at 19,463.63 (close)
Shanghai - Composite: DOWN 0.9 percent at 3,179.04 (close)
Euro/dollar: DOWN at $1.0539 from $1.0546
Dollar/yen: UP at 137.66 yen from 136.57 yen
Pound/dollar: UP at $1.2268 from $1.2262
Euro/pound: DOWN at 85.87 pence from 85.90 pence
West Texas Intermediate: UP 3.0 percent at $73.17 per barrel
Brent North Sea crude: UP 2.5 percent at $77.99 per barrel
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