(Bloomberg) -- Oil climbed more than 5% after OPEC+ surprised traders with a production cut that threatens to worsen inflation. Treasuries fell and the dollar rose.

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Energy stocks rallied in Europe, with BP Plc and Shell Plc climbing more than 4%. The benchmark Stoxx 600 was little changed. Futures for the S&P 500 fell 0.1% and those for the Nasdaq 100 declined 0.5%.

The policy-sensitive two-year Treasury yield jumped about eight basis points, pushing it back to 4.1% as traders weighed the announcement from OPEC+, which had previously given assurances that it would hold supply steady. Treasuries had ended the first quarter on Friday with yields falling as investors wagered that interest-rate cuts were on the horizon.

The durability of declining headline inflation must now be seriously questioned if oil producing countries are determined to ensure that oil prices have already bottomed,” Benjamin Picton, senior macro strategist at Rabobank, wrote in a note.

Goldman Sachs Group Inc. revised its price forecast for Brent crude on the output cut, projecting it to reach $95 per barrel this year-end and $100 in December 2024, analysts including Daan Struyven and Callum Bruce wrote in a note.

The S&P 500 had jumped 3.5% last week, the most since November, while the tech-heavy Nasdaq 100 notched its biggest quarterly gain since June 2020. A gauge of Asian equities edged lower.

The yen weakened amid concern over a Japan’s dependence on oil imports and as confidence among the nation’s large manufacturers worsened, adding to the case for the central bank to maintain ultra-easy monetary settings a while longer.

The bumpy open to Monday trading and fears of rising prices contrasts with the upbeat tone last week that came with turmoil in the banking sector receding and cooling in a key measure of US inflation.

Excluding food and energy, the Federal Reserve’s preferred inflation gauge — the personal consumption expenditures price index — rose 0.3% in February, slightly below the median estimate. That suggested the Fed may be close to ending its rate-hiking campaign.

“We’re now probably about to enter a very short-term down leg again,” Paul Gambles, MBMG Group co-founder and managing partner, said on Bloomberg Television. “We’ve had a year of pretty irresponsible policy guides and all the damage that they’ve done is now starting to show up.”

A sharp steepening of the yield curve and risk-off sentiment toward bank stocks suggests investors should remain defensively positioned, according to Morgan Stanley strategists. The team led by Michael Wilson said they see “little evidence that a new bull market has begun and believe the bear still has unfinished business,” recommending that investors focus on companies with high operational efficiency and high quality of earnings.

Elsewhere in markets, gold and Bitcoin declined. The cryptocurrency notched its best quarter since March 2021 with a gain of about 70% in the first three months of this year.

Key events this week:

• Eurozone S&P Global Eurozone Manufacturing PMI, Monday

• US construction spending, ISM manufacturing, light vehicle sales, Monday

• Eurozone PPI, Tuesday

• US factory orders, US durable goods, Tuesday

• Australia rate decision, Tuesday

• Cleveland Fed President Loretta Mester speaks, Tuesday

• Eurozone S&P Global Eurozone Services PMI, Wednesday

• US trade, Wednesday

• UBS annual general meeting, Wednesday

• US initial jobless claims, Thursday

• St. Louis Fed President James Bullard speaks, Thursday

• US unemployment, nonfarm payrolls, Friday

• Good Friday. Many markets closed, including US stock and bond markets

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 was little changed as of 8:18 a.m. London time

• S&P 500 futures fell 0.2%

• Nasdaq 100 futures fell 0.5%

• Futures on the Dow Jones Industrial Average rose 0.2%

• The MSCI Asia Pacific Index fell 0.1%

• The MSCI Emerging Markets Index fell 0.4%

Currencies

• The Bloomberg Dollar Spot Index rose 0.2%

• The euro fell 0.1% to $1.0828

• The Japanese yen fell 0.5% to 133.55 per dollar

• The offshore yuan fell 0.3% to 6.8876 per dollar

• The British pound fell 0.2% to $1.2310

Cryptocurrencies

• Bitcoin fell 0.7% to $27,871.09

• Ether was little changed at $1,791.15

Bonds

• The yield on 10-year Treasuries advanced six basis points to 3.53%

• Germany’s 10-year yield advanced five basis points to 2.34%

• Britain’s 10-year yield advanced four basis points to 3.53%

Commodities

• Brent crude rose 5.2% to $84.03 a barrel

• Spot gold fell 0.5% to $1,959.53 an ounce

This story was produced with the assistance of Bloomberg Automation.

--With assistance from Matthew Burgess.

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