Equity markets rose on Thursday as traders fought to extend this week’s global rally, though concerns about the impact of a huge oil output cut on inflation tempered hopes that central banks could soon ease their rate hike campaigns.

The mood on trading floors has been a little lighter this week, sending equities surging and weighing on the dollar, after weak readings on United States factory activity and job openings fed speculation that the Federal Reserve’s (Fed) strict tightening drive was having an effect.

But confidence took a knock on Wednesday from a better-thanexpected read on private jobs hiring and a report showing the key services sector holding up more than expected.

The figures highlighted the resilience of the US economy in the face of multiple rate hikes and point to the long road ahead for the Fed in fighting decadeshigh inflation.

Fed officials have lined up for weeks to insist that they will not budge from lifting borrowing costs until prices are tempered — even at the cost of a recession — while some have warned traders not to expect any cuts next year.

“After an increase in expectations of an imminent Fed pivot given the softer than expected US [factory data], the strength in the services [sector] not only eases concerns of an imminent US recession, it also refutes any notion that the Fed will look to take its foot off the tighten pedal any time soon,” National Australia Bank’s Rodrigo Catril said.

The latest US data came as the Organization of the Petroleum Exporting Countries (OPEC) and other major producers led by Russia decided to slash output by a massive 2 million barrels a day — the biggest reduction since the coronavirus pandemic struck.

Moscow said a possible price cap by the European Union on Russian crude would have a “detrimental effect” on the global oil sector, saying Moscow would not sell to countries that introduced it.

The news gave already elevated oil prices another leg up, with both contracts piling on more than 1 percent on Wednesday.

It also fueled concerns that energy costs — a major driver of the spike in global inflation since Russia’s invasion of Ukraine — would drive higher again.

“All the developments we have seen on the supply side at this point very much sets the stage for what we believe will be higher prices into the end of this year,” Goldman Sachs’ Damien Courvalin told Bloomberg Television. “With this cut and the winter seasonal demand, inventories will continue to fall.”

Still, crude edged up only slightly in Asia, and SPI Asset Management’s Stephen Innes said: “So far, the oil market appears to be priced to post OPEC+ perfection. The current WTI (West Texas Intermediate) move should not impact US inflation significantly nor raise eyebrows at the Fed just yet.”

All three main indexes on Wall Street ended in the red, but stronger than earlier in the day.

Asia fared better. Tokyo, Sydney, Singapore, Seoul, Taipei, Mumbai, Bangkok and Jakarta all rose again, but Hong Kong dipped after blasting almost 6 percent higher on Wednesday.

Sydney and Manila were also slightly lower. Shanghai is closed all week for a holiday.

London, Paris and Frankfurt were marginally up in the morning.

But commentators remained on guard over the outlook, with eyes now on the release of US nonfarm payroll jobs on Friday, warning that an above-forecast reading could spark another major selloff.

On currency markets, the dollar, which bounced on Wednesday after suffering a selloff for most of the week, was slightly down again in Asian business.