Stocks stage small rebound as investors weigh cenbanks' next move

Stock markets chalked up modest gains on Monday after last week's hefty losses as investors braced for a host of US Federal Reserve speakers this week, where they could underline a commitment to fight inflation whatever rate pain required.

Trading was thinned by a US holiday and investors predicted another choppy session.

The euro was little moved after French President Emmanuel Macron lost control of the National Assembly in legislative elections on Sunday, a major setback that could throw the country into political paralysis.

However, French government bond yields widened, a sign of some investor nervousness.

By 0920 GMT, the Euro STOXX rose 0.3 per cent. Germany's DAX gained 0.4 per cent while French shares eked out a similar gain despite Macron's electoral setbacks.

Holger Schmieding, an economist at Berenberg, said Macron's party would now have to learn the art of compromise to push ahead with its policies.

"As most Republicans and other mainstream forces in France are less interested in strengthening European integration than Macron, his ability to shape and promote the European agenda will be even more limited than before," he said.

Nasdaq futures climbed 0.68 per cent, building on Friday's gains while S&P 500 futures rallied 0.5 per cent.

The S&P 500 fell by almost 6 per cent last week to trade 24 per cent below its January high. Analysts at BofA noted this was the 20th bear market in the past 140 years and the average peak to trough bear decline was 37.3 per cent.

Investors will be hoping it does not match the average duration of 289 days, given it would not end until October 2022.