Stock markets edged higher on both sides of the Atlantic on Monday despite fading hopes for US interest rate cuts and worries about political upheaval in Europe, while oil prices rose.

Eurozone stocks finished higher while London's blue-chip FTSE 100 dipped into the red. 

"European markets have risen off the lows of last week but there’s little enthusiasm among investors for the region given the prevailing political uncertainty," said Chris Beauchamp, chief market analyst at online trading platform IG.

President Emmanuel Macron called an early general election after his party lost out to the far-right National Rally (RN) in EU parliament elections a week ago.

The move has fanned fears about instability in Europe's second-biggest economy, and observers said France could be on course for a standoff with the EU if extremists win.

"Uncertainty over the extent to which the far right RN party will have effective control of the next French parliament after July 7 will be an ongoing source of market angst," said Ray Attrill at National Australia Bank.

Worries about the election hammered Paris' CAC 40 index last week, pushing it down more six percent. 

It closed up 0.9 percent higher on Monday.

The head of the European Central Bank, Christine Lagarde, said Monday in response to questions on the negative market fallout from the early French election, said that the ECB was "attentive to the proper functioning of financial markets."

Lagarde stressed her aim to see inflation brought back down to the ECB's two percent target as "price stability is of course understood in parallel with financial stability."

Across the Channel, London stocks ended the day down less than 0.1 percent.

The Bank of England is expected to sit tight on interest rates on Thursday, as is customary ahead of UK elections. Britons vote for a new government on July 4, with the cost-of-living crisis one of the major factors fuelling a likely defeat for the ruling Conservatives. 

On Wall Street, the three main indices edged higher in midday trading after having opened the day lower, with investors looking forward to more data to gauge the timing of an interest rate cut by the US Federal Reserve. 

"Retail sales data tomorrow could give some clues to the market over the health of the US economy and the timing of Fed rate cuts," said City Index analyst Fiona Cincotta. 

As US inflation takes longer to cool than expected, the Fed signalled last week it expects to make one interest rate cut this year.

"Consumer spending has been an area of focus for Wall Street as the market gauges the impact of higher interest rates on the economy," added Cincotta.

In Asia, Tokyo closed down nearly two percent as investors took a risk-averse stance and fresh data fuelled worries about the US economy.

"Investors are conscious of slowdown concerns surrounding the US economy" following data last week showing a fall in consumer sentiment, noted IwaiCosmo Securities.

Oil prices rose more than one percent despite weaker-than-expected economic data out of China.

"Oil’s resilience suggests investors are expecting the oil market to tighten as we head deeper into the US driving season," said City Index and FOREX.com analyst Fawad Razaqzada. 

Key figures around 1530 GMT

New York - Dow Jones: UP 0.1 percent at 38,630.64 points 

New York - S&P 500: UP 0.2 percent at 5,443.11

New York - Nasdaq: UP 0.2 percent at 17,722.84

Paris - CAC 40: UP 0.9 percent at 7,571.57 (close)

Frankfurt - DAX: UP 0.4 percent at 18,068.21 (close)

EURO STOXX 50: UP 0.9 percent at 4,880.42 (close)

London - FTSE 100: DOWN less than 0.1 percent at 8,142.15 (close)

Tokyo - Nikkei 225: DOWN 1.8 percent at 38,102.44 (close)

Hong Kong - Hang Seng Index: FLAT at 17,936.12

Shanghai - Composite: DOWN 0.6 percent at 3,015.89 (close)

Euro/dollar: UP at $1.0724 from $1.0708 on Friday

Euro/pound: UP at 84.50 pence from 84.38 pence

Dollar/yen: UP at 157.87 yen from 157.37 yen 

Pound/dollar: UP at $1.2690 from $1.2689

West Texas Intermediate: UP 1.4 percent at $79.51 per barrel

Brent North Sea Crude: UP 1.1 percent at $83.53 per barrel