Weak earnings from banking titan Goldman Sachs, a jobs warning by Microsoft and a plunge in manufacturing data highlighted the bumpy road ahead for the United States, the world's top economy, despite optimism over inflation and the improving interest rate outlook.

Still, hopes for China's recovery continued to provide much-needed support, with Chinese Vice Premier Liu He telling the Davos forum that growth will likely rebound this year as the country reopens after zero-COVID while adding that COVID-19 infections had peaked.

His comments came after data showed the Chinese economy expanded last year at its slowest pace since 1976, excluding pandemic-hit 2020, but beat forecasts.

The news added to hopes for a global recovery after last year's pain caused by rising prices, rate hikes, China's economic woes, a spike in energy costs and the war in Ukraine.

"Last fall, there was broad consensus that China was in the wrong place, Europe was slipping into a recession and the Fed was ultimately caught 'wrong-footed' by very sticky inflation," said SPI Asset Management's Stephen Innes.

"But fast-forward to these early weeks of January, and China's reopening has put the country on a path to much better growth, investors are far more optimistic about Europe's recovery and the bane of all ills US inflation is even starting to recede."

Popular

Social media rumours, economic hardship fuel migrant surge into Ceuta

Malaysian pilot risks death penalty for smuggling ecstasy in Indonesia

Google rolls back new satellite image AI tool after backlash