FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., August 19, 2025. REUTERS/Brendan McDermid/File Photo

By Sinéad Carew and Alun John

NEW YORK/LONDON (Reuters) - A global index of stocks was higher on Monday while the dollar fell broadly - but gained against the yen - as investors grappled with political uncertainty in countries from Japan and Indonesia to France and Argentina.

A heavy election defeat for Argentine President Javier Milei's ruling party in Buenos Aires province sent the Argentinian peso to a record low, down as much as 7.5%.

Argentine stocks plunged more than 10% - headed for the sharpest daily drop since March 2020 - raising uncertainty ahead of a key October vote.

Japanese Prime Minister Shigeru Ishiba resigned on Sunday, ushering in a potentially lengthy period of uncertainty at a shaky moment for the world's fourth-largest economy, prompting the yen to fall against the dollar.

France's fourth prime minister in less than two years, François Bayrou, looked set for defeat in a confidence vote on Monday, tipping the euro zone's second-biggest economy further into political and economic paralysis.

And in Indonesia,stocks gave up early gains to finish lower, while the rupiah rose, after Finance Minister Sri Mulyani Indrawati was ousted in a cabinet shake-up.

Friday had seen weaker than expected U.S. labor data for August, which appeared to seal the case for a Federal Reserve interest rate cut this month.

The prospect of a cut and optimism that U.S. inflation data due later in the week would be benign pushed down U.S. Treasury yields for the fourth straight day, to their lowest level since April.

"The weakening dollar against most currencies is boosting returns in foreign stock indices. There are country-by country concerns. But a lot of news in France is priced in and Japan's prime minister could be replaced by a much more dovish, market-friendly prime minister," said Gene Goldman, Chief Investment Officer at Cetera Investment Management in the U.S.

US STOCKS SLIGHTLY HIGHER

MSCI's gauge of stocks around the globe rose 3.36 points, or 0.35%, to 959.07, erasing Friday's losses, while the pan-European STOXX 600 index rose 0.28%.

Emerging market stocks rose 7.33 points, or 0.58%, to 1,283.41.

MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.67% higher at 674.48, while Japan's Nikkei rose 625.06 points, or 1.45%, to 43,643.81.

On Wall Street, on Monday at 10:40 a.m. the Dow Jones Industrial Average was down 7.83 points, or 0.02%, at 45,393.03; the S&P 500 was up 20.18 points, or 0.31%, at 6,501.58 and the Nasdaq Composite was up 176.84 points, or 0.82%, at 21,877.23.

In currencies, the dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.29% to 97.59, with the euro up 0.24% at $1.1745.

Against the Japanese yen, the dollar strengthened 0.27% to 147.78.

In U.S. Treasuries, the yield on benchmark U.S. 10-year notes fell 2.5 basis points to 4.061%, from 4.086% late on Friday while the 30-year bond yield fell 5.1 basis points to 4.7233% from 4.774% late on Friday.

The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 1.6 basis points to 3.491%, from 3.507% late on Friday.

Oil prices climbed to regain some of last week's losses, after OPEC+'s output hike was seen as modest and due to concerns over the possibility of more sanctions on Russian crude.

U.S. crude rose 0.45% to $62.16 a barrel and Brent rose to $65.92 per barrel, up 0.64% on the day.

Gold surged past $3,600 an ounce for the first time on Monday, as soft U.S. labor data reinforced expectations that the Fed will cut interest rates next week.

Spot gold rose 1.37% to $3,635.39 an ounce. U.S. gold futures rose 0.55% to $3,632.90 an ounce.

(Reporting by Sinéad Carew in New York, Ankur Banerjee in Singapore and Alun John in London; Editing by Helen Popper, Kirsten Donovan and Kevin Liffey)