LONDON - Global shares struggled to advance on Monday with oil prices nearly 2 percent lower.
Weaker US stock index futures also weighed on sentiment, while a steadier dollar knocked gold.
The MSCI all country index was barely firmer, a month-long advance having whittled away the benchmark's decline for the year to about 13 percent.
Until now, investors have been grappling with how much further central banks in the United States and Europe would hike rates when they meet next month.
Hopes of smaller rate hikes on signs that US inflation may be peaking helped Wall Street clock up its fourth straight week of gains by Friday.
The gains on Wall Street and steady growth figures for Japan helped the Nikkei share average in Tokyo jump to its highest in more than seven months.
"I do think it's going to be Fed driven if there is another leg down in markets. Quantitative tightening, I think, will begin in earnest in September and that's going to withdraw liquidity from the market," said Patrick Armstrong, chief investment officer at investment house Plurimi Group.
Markets are still implying around a 50 percent chance the Fed will hike by 75 basis points in September and that rates will rise to around 3.50-3.75 percent by the end of the year.
The Fed will publish minutes on Wednesday from its last rate-setting meeting, but investor hopes of them showing the central bank beginning to pivot on rate hikes could be dashed.
"I don't think (Fed Chair) Powell is going to say that, I don't think the minutes are going to indicate that," Armstrong said.
In Europe, the STOXX share index of 600 leading companies was up 0.13 percent at 441.43 points, still down around 10 percent for the year.
US futures ease
S&P 500 futures and Nasdaq futures were both down around 0.5 percent after last week's gains.
Earnings from major retailers, including Walmart and Target, will be scrutinized for signs of flagging consumer demand.
The bond market still seems to doubt the Fed can manufacture a soft landing, with the yield curve remaining deeply inverted. Two-year yields at 3.27 percent are well above those for 10-year notes which were trading at 2.86 percent.
Those yields have underpinned the US dollar, though it did slip 0.8 percent against a basket of currencies last week as risk sentiment improved.
But on Monday the dollar regained some poise, with the euro down 0.2 percent against the greenback at $1.02345 after bouncing 0.8 percent last week. Against the yen, the dollar steadied at 133.51 after losing 1 percent last week.
"Our sense remains that the dollar rally will resume before too long," argued Jonas Goltermann, a senior economist at Capital Economics.
Gold was down 0.8 percent at $1,786, losing nearly all of its 1 percent gains last week.
The head of the world's top exporter, Saudi Aramco, said it was ready to ramp up output while production at several offshore US Gulf of Mexico platforms is resuming after a brief outage last week.
Brent slipped 1.8 percent to $96.35, while US crude fell 1.9 percent to $90.34 per barrel.
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