The Spanish stock market index Ibex-35 closed Monday with a slight advance after the heavy losses accumulated in the previous three sessions, in a context of doubts about the future of interest rates, while the concern after the failed riot in Russia subsided.

With stability apparently restored in Russia after a near riot by Wagner Group mercenaries over the weekend, the markets' attention is once again focused on monetary developments, after the central banks of the United Kingdom, Switzerland and Norway last week expressed their support for further rate hikes in the face of inflation.

Despite the pause agreed by the US Federal Reserve at its last meeting, recent statements by its chairman in favor of raising rates again and the slowdown in US business activity reported on Friday raise fears of an economic recession.

"How investors buy or sell right now is going to depend on the assumption that they're going to have a rate hike at the end of next month," said Randy Frederick, vice president of trading and derivatives at Charles Schwab, referring to the Fed's upcoming meeting.

"All the data we get between now and then, especially labor market and inflation data, will have an impact on this (rate expectations)."

Money markets expect the Fed to raise rates another 25 basis points in July, while most policymakers are targeting at least two more such rate hikes by the end of this year, although markets expect them to remain steady through the end of 2023, according to CMEGroup's Fedwatch tool.

The week will see numerous macroeconomic data releases of relevance to the future of US rates: new durable goods orders, housing data, the Commerce Department's final Q1 GDP report, consumer surveys from The Conference Board and the University of Michigan, and Friday's comprehensive Personal Consumption Expenditure (PCE) report covering consumer income and spending and, most importantly, inflation.

In Europe, where European Central Bank policymakers have been vocal about the need for further credit tightening, Monday brought news that German business confidence worsened for the second month in a row in June.

As a result, the Spanish Ibex-35 closed up 8.20 points on Monday, or 0.09%, to 9,274.00 points, while the FTSE Eurofirst 300 index of large European stocks lost 0.09%.

In the banking sector, Santander rose 0.57%, BBVA gained 1.44%, Caixabank gave up 0.58%, Sabadell gained 1.45%, Bankinter dropped 1.30% and Unicaja Banco rose 0.55%.

Among the large non-financial stocks, Telefónica fell 0.74%, Inditex advanced 0.09%, Iberdrola dropped 0.13%, Cellnex fell 0.61%, and the oil company Repsol rose 1.08%.

(Information by Darío Fernández; additional information by Sruthi Shankar and Johann M. Cherian).