A rally on stock markets lost its legs Monday as investors looked ahead to key interest-rate decisions this week in the United States and elsewhere.
While leading Asian indices closed mostly higher, Europe and Wall Street saw early gains fade as traders failed to shake off last week's volatility caused by mixed earnings and big selling of technology stocks.
In Europe, London eked out a miniscule gain while Frankfurt and Paris fell.
Wall Street's main indices wobbled in morning trading.
"The rebound in risk assets seen at the end of last week has, unsurprisingly, stalled, as investors prepare for an action-packed few days," said Chris Beauchamp, chief market analyst at online trading platform IG.
"Wall Street has rallied off its lows of the past week, but few traders will be willing to sound the all clear yet," he added.
"BoJ, Fed and BoE decisions, plus payrolls and earnings from the all-important tech sector, mean that it's far too early to jump in with both feet."
The US Federal Reserve, Bank of England and Japan's central bank are due this week to update on their monetary policies, with US jobs data and more results from multinationals also set to come out.
Wall Street stocks rebounded on Friday on data showing a moderation in US inflation, firming expectations the Federal Reserve will start cutting interest rates in September, and had provided a positive signal for the start of the trading day in Asia.
"While no change is expected at the Federal Reserve meeting this week, the odds are now strongly in favour of a cut in September," noted Richard Hunter, head of markets at Interactive Investor.
Fawad Razaqzada, market analyst at City Index and FOREX.com, said "the Fed adopting a more dovish tone is what we expect to witness", adding that in addition to the 0.25-percentage-point cut in September the market has priced in nearly two more quarter-point rate cuts.
On Thursday, a day after the Fed's latest decision, the Bank of England may cut borrowing costs for the first time since the Covid pandemic after a sizeable fall in British inflation this year, analysts said.
They added that the decision is on a knife-edge, similar to what is expected over the Bank of Japan's decision.
Expectations for a rise, either this week or at the BoJ's next meeting, along with bets on a Fed cut, have helped push the yen higher against the dollar after it hit a four-decade low near the start of July.
Moody's Analytics believes the BoJ will leave rates on hold despite a pickup in Japanese inflation.
Oil prices fell despite rising tensions in the Middle East as Israeli Prime Minister Benjamin Netanyahu vowed a "severe response" to the rocket fire in the annexed Golan Heights that killed 12 children.
Market analyst David Morrison at Trade Nation said traders are more worried about demand rather than supply.
"For now, there are enough concerns over the state of the Chinese economy to keep a lid on prices," he said.
McDonald's was the latest company to report second-quarter results on Monday.
Its shares rose more than four percent despite the fast food chain missing sales and profit estimates, with restaurants in both the United States and abroad seeing sales decline.
Key figures around 1530 GMT
New York - Dow: DOWN 0.2 percent at 40,491.21 points
New York - S&P 500: DOWN 0.1 percent at 5,452.45
New York - Nasdaq Composite: DOWN 0.2 percent at 17,331.74
London - FTSE 100: UP less than 0.1 percent at 8,292.35 (close)
Paris - CAC 40: DOWN 1.0 percent at 7,443.84 (close)
Frankfurt - DAX: DOWN 0.5 percent at 18,320.67 (close)
Euro STOXX 50: UP less than 0.1 percent at 4,815.39 (close)
Tokyo - Nikkei 225: UP 2.1 percent at 38,468.63 (close)
Hong Kong - Hang Seng Index: UP 1.3 percent at 17,238.34 (close)
Shanghai - Composite: FLAT at 2,891.85 (close)
Dollar/yen: UP at 153.90 yen from 153.75 yen on Friday
Euro/dollar: DOWN at $1.0821 from $1.0859
Pound/dollar: DOWN at $1.2852 from $1.2875
Euro/pound: DOWN at 84.22 pence from 84.32 pence
West Texas Intermediate: DOWN 1.5 percent at $76.01 per barrel
Brent North Sea Crude: DOWN 1.4 percent at $80.01 per barrel