LONDON, May 25 — European and US stock markets struggled to mount a rebound today as investors weighed the fallout from surging inflation, higher interest rates, China's economic slowdown and the Ukraine war.

The day before, global equities had retreated as volatility grips financial markets.

A series of weak indicators around the world and downbeat forecasts from big firms have chilled trading floors in recent weeks as the surge in prices begins to drag on consumer confidence, with warnings now swirling of a possible global recession.

The tech sector was again in the firing line after Snap, the parent of social media app Snapchat, provided a gloomy economic outlook, sending its shares diving more than 40 percent on Wall Street Tuesday.

Wall Street titans followed Snap down, with Facebook-parent Meta and Google-parent Alphabet tanking.

"The feel-good factor from earlier in the week has fizzed away, but there is still some element of relief washing through the financial markets that the crutch of cheap money isn't going to be withdrawn quite so quickly," said Susannah Streeter, investment and markets analyst at Hargreaves Lansdown.

She said expectations that the Federal Reserve would avoid hiking US interest rates by as much as 0.75 percent in one go to bring down inflation "helped lift the Dow Jones (Tuesday)... and has steadied overall market sentiment".

Investors are awaiting the Fed's next move on interest rates, with expectations for more half-point hikes to come as officials struggle to bring inflation down from four-decade highs.

With minutes from the Fed's most recent policy meeting due out later Wednesday, Wall Street's main stock indices opened lower, with the Dow shedding 0.4 percent.

The broader S&P 500 as well as the tech-heavy Nasdaq were down by a similar amount.

With numerous Fed officials having spoken since the meeting, "the minutes released today may not move today's trading dial much, unless they convey some more aggressive-minded thinking on the pace of balance sheet reduction," said Patrick J. O'Hare at Briefing.com.

European stocks made modest gains in afternoon trading.

Traders are also closely watching China, which continues to struggle with the fast-spreading Omicron coronavirus variant.

The world's second-biggest economy is sticking to its zero-Covid strategy despite the dire impact of lockdowns on growth.

And with no easing of that policy in sight, observers warned that a series of recent support measures would not be enough to lift optimism.

"Fiscal multipliers will be minimal in an economy where economic interaction and activity have slowed sharply," said Stephen Innes of SPI Asset Management.

"Moving beyond mobility restrictions in short order is a pre-condition, but not a guarantee, for an Asia-led economic recovery."

Russia's invasion of Ukraine has meanwhile put financial markets under renewed stress by driving up prices and impeding growth, the European Central Bank said in a report published today.

Inflation in the eurozone, as elsewhere, has accelerated as costs for energy, agricultural goods and raw materials have risen sharply. — AFP