Global stocks advanced in the first two months of the quarter before an inflation scare sent markets tumbling in September. Rising consumer prices sparked fears of higher interest rates as major central banks considered taking steps to fight inflationary pressures. Concerns about growing infection rates from the COVID-19 delta variant also weighed on markets.

Financial stocks led markets higher, rising 2% in aggregate as the prospect of higher lending rates and improving economic growth boosted bank stocks. The information technology sector also posted strong gains. Conversely, the materials sector fell sharply amid widespread supply chain shortages and worries about China’s slowing economy.

Bond market returns were mixed amid signs of higher inflation and an announcement from the U.S. Federal Reserve that it may begin gradually reducing its bond-buying stimulus program. Officials at the European Central Bank said they may do the same with their pandemic-related stimulus program as eurozone inflation climbed to its highest level in more than a decade.