Stock market today: Stocks fall in Europe after gains in Asia. US markets are closed for a holiday | Stock market

HONG KONG (`) — European markets opened lower Monday while Asian markets were mostly higher as the week got off to a mixed start.

U.S. markets will remain closed for Martin Luther King Day, a holiday.

France's CAC 40 fell 0.1% to 7,454.74. Germany's DAX fell 0.1% to 16,688.90 and Britain's FTSE 100 fell 0.2% to 7,619.80.

The S&P 500 futures gained 0.1% and the Dow Jones Industrial Average was virtually unchanged.

China's central bank decided on Monday to keep the interest rate on one-year policy loans at 2.5% while pumping funds into the financial system. That surprised market watchers because it went against the expected trend of lowering borrowing costs to stimulate the economy.

“Policy focus has shifted to the effectiveness of monetary policy,” ANZ’s Zhaopeng Xing and Raymond Yeung said in a report. “Today’s lockdown means there is a higher chance of a reserve requirement ratio (RRR) cut in February.”

Hong Kong's Hang Seng lost 0.2% to 16,216.33 and the Shanghai Composite Index rose 0.2% to 2,886.29.

Search engine provider Baidu plunged 11.5% after a local newspaper report claimed that the company's Ernie AI platform was linked to Chinese military research into artificial intelligence. Baidu said in a statement that it “has no association or other partnership with the academic institution in question.”

The Nikkei 225 in Tokyo briefly topped 36,000 on Monday for the first time in 34 years, but ended the day slightly lower, gaining 0.9% to close at 35,901.79. The Kospi in South Korea remained almost unchanged at 2,525.99.

Ruling party candidate Lai Ching-te emerged victorious in Taiwan's presidential election on Saturday, a result that will determine the course of the self-governing democracy's contentious relationship with China over the next four years. The Democratic Progressive Party, of which Lai is a member, has consistently rejected China's claims of sovereignty over Taiwan.

Taiwan's Taiex rose 0.2% to 17,546.82.

Australia's S&P/ASX 200 was virtually unchanged at 7,496.30.

On Friday, the S&P 500 edged up 0.1% and the Dow Jones Industrial Average fell 0.3%, weighed down by a sharp loss from UnitedHealth Group following its results. The Nasdaq was basically flat, rising less than 0.1%.

Stocks have been racing to record levels for months, pushing the S&P 500 to within 0.3% of its all-time high on hopes that inflation will cool enough for the Federal Reserve to cut interest rates several times this year.

Those expectations have already pushed Treasury yields lower in the bond market, and they fell further after a report showed U.S. wholesale inflation was weaker than economists expected last month. The data bolstered expectations for rate cuts, a day after another report showed consumer inflation was higher than expected.

The yield on the 10-year Treasury note fell to 3.94% from nearly 4% just before the report was released. In October it was over 5%, the highest level since 2007. Loose interest rates and yields reduce pressure on the economy and the financial system while driving up investment prices.

Traders are largely betting that the Fed will cut its key interest rate six or more times by 2024. That would be a much more aggressive course than the Fed itself has indicated. She even warned against raising interest rates further if inflation could not convincingly move towards its 2% target. The federal funds rate is already at its highest level since 2001.

In other trading, a barrel of benchmark U.S. crude oil lost 33 cents to $72.35. Brent crude, the international standard, lost 30 cents to $77.99 a barrel.

The US dollar was at 145.50 Japanese yen, up from 144.92. The euro rose from $1.0950 to $1.0955.

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