San Francisco Frontiers - Stock markets diverge amid trade hopes, ahead of earnings

While that was enough to help most Asian and European equities markets rise, investors on Wall Street took some money off the table ahead of upcoming corporate earnings reports and key economic data.

"A weekend light on drama was just what the doctor ordered for financial markets," said AJ Bell investment director Russ Mould.

Analysts said that market sentiment has calmed since Trump dialled down pressure on Federal Reserve boss Jerome Powell and hinted at progress in trade talks with economic partners.

"While last week's market action and today's early session suggest calmer waters, any sense of security is precarious," said City Index and FOREX.com analyst Fawad Razaqzada.

"Underneath the surface, key risks persist -- trade tensions, recession worries, and monetary policy uncertainties are very much alive."

Investors will have plenty of corporate earnings and economic data to command their attention.

"This week will be the first for a while where data and earnings will compete with tariff headlines," said Jim Reid, global head of macro research at Deutsche Bank.

US giants Amazon, Apple, Meta and Microsoft all report their first quarter earnings this week, with investors looking to assess the impact of tariffs on businesses.

Eyes will also be on the release of several closely-watched US economic indicators which "may either dampen or revive concerns about recession in the world's largest economy," Mould added.

Crude prices fell as investors worried about the impact of the trade war on the US economy.

Bjarne Schieldrop said oil demand is "at risk as US consumers soon will face hard tariff realities".

Analysts are concerned that the punitive tariff levels that the US and Chinese government have imposed could lead to shortages of certain goods.

US Treasury Secretary Scott Bessent said Monday he was not concerned "at present" about American stores potentially running out of items due to Trump's tariffs.

Traders are hoping governments can hammer out deals with Trump to soften the impact of his sweeping tariffs, with reports last week saying China was considering exempting some US goods from its hefty retaliatory measures.

Beijing has said there are no active negotiations between the economic superpowers and on Monday an official denied Trump's claims to have spoken with Xi by phone.

In Beijing, senior economic planner Zhao Chenxin said China was on the "right side of history" in its gruelling trade war with the United States.

Japanese media reported that a second round of trade talks in Washington was set for Thursday.

The discussions will be closely watched as a barometer for efforts by other countries seeking tariff relief.

Bessent said earlier a trade "understanding" between South Korea and the United States could be reached by this week.

- Key figures at 1530 GMT -

New York - Dow: DOWN 0.1 percent at 40,073.25 points

New York - S&P 500: DOWN 0.7 percent at 5,489.46

New York - Nasdaq: DOWN 1.2 percent at 17,173.28

London - FTSE 100: FLAT at 8,417.34 (close)

Paris - CAC 40: UP 0.5 percent at 7,573.76 (close)

Frankfurt - DAX: UP 0.1 percent at 22,271.67 (close)

Tokyo - Nikkei 225: UP 0.4 percent at 35,839.99 (close)

Hong Kong - Hang Seng Index: FLAT at 21,971.96 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,288.41 (close)

Euro/dollar: UP at $1.1382 from $1.1359 on Friday

Pound/dollar: UP at $1.3390 from $1.3314

Dollar/yen: DOWN at 142.70 yen from 143.69 yen

Euro/pound: DOWN at 85.00 pence from 85.31 pence

West Texas Intermediate: DOWN 1.7 percent at $61.96 per barrel

Brent North Sea Crude: DOWN 1.7 percent at $64.66 per barrel

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S.Jackson--SFF