Investors have been on edge over worries that rising interest rates, aimed at fighting sky-high inflation, could spark recessions, while the United Nations has called on central banks to slow down or risk pushing the world into grim prolonged stagnation.

Oil jumps but dollar bruised on US data, Source: freepik.com

A key manufacturing survey showing price pressures receding and demand slowing, helped buoy market sentiment amid hopes the Federal Reserve might soon pull back on its aggressive interest rate hikes.

The Institute for Supply Management said its manufacturing index dropped 1.9 points to 50.9 percent, just barely above the 50-percent threshold indicating expansion, as the prices index fell to the lowest in more than two years.

Fed officials have said the central bank will continue raising interest rates until inflation begins to drop, even if that means the US economy enters recession.

New York Fed President John Williams reiterated that message on Monday, saying that despite signs of easing demand and supply issues, inflation has become "broad-based ... which will take longer to bring down."

Still, investors are hoping interest rates may be close to a peak and the benchmark Dow jumped 2.7 percent, a good start to the new quarter after Wall Street's worst month in 20 years.

Adam Sarhan of 50 Park Investments said "the market was extremely oversold," which led some investors to come back looking for cheap shares.

"That happens during bear markets, the biggest up moves in history happened during bear markets," he told AFP.

European stock indices moved higher following the US data, with Frankfurt's DAX index ending the day 0.8 percent higher, the Paris CAC climbing 0.6 percent and London's FTSE 100 adding 0.2 percent.

- Oil spikes before OPEC -

Oil prices leapt on reports that OPEC and its allies are considering a major output cut to stem a price plunge caused by demand worries.

But that stoked concerns about soaring inflation, which has been fueled this year by sky-high energy prices after key producer Russia's invasion of Ukraine.

"Any cut will no doubt frustrate consuming countries that are on the verge of recession after spending a year dealing with soaring energy costs on the back of the post-pandemic recovery and war in Ukraine," said OANDA analyst Craig Erlam.

Officials from the 13 members of the Organization of the Petroleum Exporting Countries (OPEC), led by Riyadh, and their 10 partners, led by Moscow, are due to meet physically on Wednesday for the first time since March 2020.

- Sterling gains on U-turn -

The British pound bounded above $1.13 following the latest US data, and after the UK government scrapped plans to axe its top income tax rate which helped send sterling spiraling to a record dollar low of $1.0350 a week ago.

Shares in Credit Suisse plunged to a new low in Zurich on Monday as the scandal-plagued lender sought to ease concerns about its financial health.

Its stock tumbled 11.6 percent to 3.58 Swiss francs ($3.61) before clawing back most of the ground, ending the day with a drop of 0.9 percent at 3.94 francs.

The Financial Times reported that senior executives sought over the weekend to reassure big clients and investors about the bank's liquidity and capital position due to concerns raised about its financial strength.

Asian equities mainly fell Monday, with Hong Kong tumbling to its lowest point in more than a decade as fears for China's economy deepens this year's investor rout.

- Key figures around 2030 GMT -

New York - Dow: UP 2.7 percent at 29,490.89 (close)

New York - S&P 500: UP 2.6 percent at 3,678.43 (close)

New York - Nasdaq: UP 2.3 percent at 10,815.44 (close)

EURO STOXX 50: UP 0.7 percent at 3,342.17 (close)

London - FTSE 100: UP 0.2 percent at 6,908.76 (close)

Frankfurt - DAX: UP 0.8 percent at 12,209.48 (close)

Paris - CAC 40: UP 0.6 percent at 5,794.15 (close)

Tokyo - Nikkei 225: UP 1.1 percent at 26,215.79 (close)

Hong Kong - Hang Seng Index: DOWN 0.8 percent at 17,079.51 (close)

Shanghai - Composite: Closed for a holiday

Pound/dollar: UP at $1.1315 from $1.1170 on Friday

Euro/dollar: UP at $0.9822 from $0.9802

Euro/pound: DOWN at 86.74 pence from 87.75 pence

Dollar/yen: DOWN at 144.66 yen from 144.74 yen

Brent North Sea crude: UP 4.4 percent at $88.86 per barrel

West Texas Intermediate: UP 5.2 percent at $82.63 per barrel