Equities fluctuated Monday as traders took a breather after the past weeks’ healthy run as they absorbed weak Chinese data and reports that the United States planned to ramp up tariffs on clean energy products from the Asian country.

A sharp drop in US consumer confidence and a pick-up in inflation expectations also weighed on sentiment as eyes turn to the release later this week of the latest consumer price index (CPI).

The readings follow a recent rally across world markets fuelled by optimism that the Federal Reserve and other major central banks will soon cut interest rates.

The week was set to begin on a tepid note after figures showed a drop in a broad measure of credit in China that sparked worries of a further slackening in the world’s number two economy.

That came as the Wall Street Journal reported that the White House is looking at almost quadrupling tariffs on Chinese electric vehicles as part of a plan that will also target batteries and solar cells.

A decision, expected on Tuesday according to reports, would come as President Joe Biden gears up for a rematch with Donald Trump in November’s presidential election.

Last month, he urged for a tripling on tariffs for steel and aluminium as he courted blue-collar voters.

Still, analysts said the decision on EVs would not likely have much impact on China’s growth as the sector was not reliant on US buyers, while some said retaliatory actions were unlikely.

The news came after weekend figures showing China’s CPI rose more than expected in April, marking the third straight month of gains and providing some fresh hope for the economy.

In New York, the Dow and S&P 500 rose, even as a report showed consumer sentiment tumbled in April to its lowest level since November, while a survey of inflation expectations over the next year picked up.

Investors are now keeping a close eye on the US CPI, which is due Wednesday and will be pored over for an idea about the Fed’s plans. The reading comes after three straight months of forecast-beating readings that have seen a whittling away of rate cut expectations.

Meanwhile, Dallas Fed chief Lorie Logan warned she thought it too early to think about any reductions, while governor Michelle Bowman did not see so far foresee any this year.

“As long as the labour market remains tight, consumer resilience could continue to dampen hopes of inflation cooling off,” Subadra Rajappa, at Societe Generale in New York, said.

“A resumption of the disinflationary trend is imperative for the Fed to consider cutting this year.”

Discussion on the US rate outlook comes as expectations rise that the European Central Bank and Bank of England are planning to cut in the summer.

London, Paris, Frankfurt and Amsterdam all hit new heights, with shares also benefitting from strong first-quarter earnings.

However, Asian markets were mixed in early exchanges, with Shanghai, Sydney, Seoul, Wellington and Jakarta all down, while Hong Kong, Singapore, Taipei and Manila rose, with Tokyo flat.

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: FLAT at 38,243.59 (break)

Hong Kong – Hang Seng Index: UP 0.6 percent at 19,084.04

Shanghai – Composite: DOWN 0.5 percent at 3,139.55

Dollar/yen: DOWN at 155.85 yen from 155.88 yen on Friday

Euro/dollar: DOWN at $1.0770 from $1.0772

Pound/dollar: DOWN at $1.2522 from $1.2525

Euro/pound: DOWN at 86.01 from 86.06 pence

West Texas Intermediate: DOWN 0.6 percent at $77.82 per barrel

Brent North Sea Crude: DOWN 0.6 percent at $82.32 per barrel

New York – Dow: UP 0.3 percent at 39,512.84 (close)

London – FTSE 100: UP 0.6 percent at 8,433.76 (close)