Global stock markets mostly retreated Monday, as recent record heights gave way to concern over increased geopolitical tensions and stubbornly-high inflation according to traders.
"Heightened tensions between Ukraine and Russia have brought a halt to the rally in equity markets seen last week," said Russ Mould, investment director at AJ Bell.
"Investors were nervously watching proceedings from the sidelines, particularly as oil prices crept up once again."
Moscow has escalated its aerial attacks on Kyiv, targeting key infrastructure in the wake of Ukrainian attacks on Russian oil facilities.
Russia is a key producer of oil, while the Gaza-Israel war has given rise to worries about Middle Eastern crude supplies.
Adding to the complex geopolitical landscape, the Islamic State group has claimed responsibility for the attack on a Moscow concert hall on Friday that left at least 137 people dead.
The Kremlin refused to comment Monday on the Islamic State group's links to the massacre.
Oil prices are "a touch firmer this morning as traders react to the terrorist attack in Moscow over the weekend, amid uncertainty over who Russia will finally blame, and how they will ultimately react," said market analyst David Morrison at Trade Nation.
He said Russia's suggestions of Ukraine involvement in the Moscow attack "serves to heighten tensions in the two-year long war which has intensified as both sides fire missiles at each other, with energy infrastructure now a clear target."
Inflation
Stock markets also took a knock from concerns about elevated inflation, even if it has come down from four-decade highs and central banks are poised to start cutting interest rates.
"Optimism has been surging about the prospects for interest-rate cuts and brighter economic horizons ahead, despite some uncertainty lingering about stubborn inflation in the US," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
Traders were awaiting the release Friday of key US inflation data.
After last week's Federal Reserve projections for US interest rates indicated it would cut three times this year, traders are optimistic about the outlook for equities.
However, figures showing the US economy remains strong raised concerns that the central bank might not be able to bring borrowing costs down as quickly as hoped, keeping a lid on sentiment.
Those concerns were echoed by Atlanta Fed chief Raphael Bostic on Friday, when he said he saw inflation remaining sticky and expected just one rate cut this year, instead of the two he had previously foreseen.
Eyes are now on the release of the personal consumption expenditures (PCE) index, the Fed's preferred gauge of inflation, with traders hoping for a reading that shows price gains slowing further.
The report follows recent US data on consumer and producer prices, which came in higher than forecasts.
Shares in Boeing climbed 1.6 percent as trading got underway in New York after the company announced Monday that CEO Dave Calhoun would leave his post as the aviation giant faces increased scrutiny after a series of safety incidents and manufacturing issues.
Key figures around 1330 GMT
New York - Dow: DOWN 0.2 percent at 39,415.60 points
New York - S&P 500: DOWN 0.3 percent at 5,218.63
New York - Nasdaq Composite: DOWN 0.6 percent at 16,335.47
London - FTSE 100: DOWN 0.3 percent at 7,907.80
Paris - CAC 40: DOWN 0.2 percent at 8,135.66
Frankfurt - DAX: UP 0.1 percent at 18,223.60
EURO STOXX 50: DOWN less than 0.1 percent at 5,028.34
Tokyo - Nikkei 225: DOWN 1.2 percent at 40,414.12 (close)
Hong Kong - Hang Seng Index: DOWN 0.2 percent at 16,473.64 (close)
Shanghai - Composite: DOWN 0.7 percent at 3,026.31 (close)
Euro/dollar: UP at $1.0831 from $1.0812 on Friday
Dollar/yen: DOWN at 151.23 yen from 151.40 yen
Pound/dollar: UP at $1.2638 from $1.2601
Euro/pound: DOWN at 85.69 pence from 85.77 pence
Brent North Sea Crude: UP 0.5 percent at $85.82 per barrel
West Texas Intermediate: UP 0.6 percent at $81.10 per barrel