European stocks retreated on Monday after more countries halted use of the AstraZeneca Covid-19 vaccine, while US stocks closed at records as traders bet on an improving economy.
Denmark halted use of the AstraZeneca vaccine last week following concerns it may be linked to blood clots, prompting a growing number of European countries to follow suit.
"If the AstraZeneca jab is proven to cause blood clots, and more countries are forced to stop using it then this will provide a major setback in the race to end lockdowns," said Fawd Razaqzada at ThinkMarkets.
"European stocks have struggled throughout the day, and the selling accelerated in the afternoon after France and Italy became the latest European nations to halt the use of the AstraZeneca-Oxford Covid jab, following Germany and a few other nations."
European medical regulators and the World Health Organization have said the vaccine is safe to use and there is no evidence linking it to blood clotes.
Both London and Paris closed 0.2 percent lower, while Frankfurt shed 0.3 percent.
The dollar firmed ahead of Wednesday's US Federal Reserve monetary policy meeting, in which central bankers will almost certainly not raise rates but could comment on the possibility inflation will rise if Covid-19 vaccines and government stimulus revitalize the economy.
Wall Street has already generally come around to the idea that the country is set for brighter days but that will mean interest rates eventually rise, prompting a rebalancing as traders exit tech stocks in favor of cyclical industries.
"It looks as if it's bottomed out but I don't think the rotation is totally over with," said Peter Cardillo of Spartan Capital Securities, noting that Apple and Cisco rose in the session but Amazon and Microsoft fell.
The Dow and S&P 500 both posted their second straight day of record-setting closes, while the tech-rich Nasdaq finished 1.1 percent higher.
- Inflation looms -
Brent oil topped $70 per-barrel on positive industrial production and retail sales data in key crude consumer China, but then fell back.
Bitcoin stood around $56,000 after hitting a record $61,742 on Saturday on keen demand for the world's most popular cryptocurrency.
Asian stock markets closed mixed as early rallies ran out of steam.
Investors have been emboldened this year as Covid vaccine rollouts and the easing of most lockdowns have stoked recovery hopes.
Bets on a strong rebound increased last week as US President Joe Biden signed off on his $1.9 trillion stimulus plan, which includes big cash handouts for struggling Americans.
Investors' fears of rising US inflation have been reflected in the spike in government debt yields, particularly benchmark 10-year Treasury notes -- a canary in the coal mine for coming price increases.
"The passage of the $1.9 trillion American Rescue Plan is set to release another boost to a US economy which was already showing some signs of a turnaround," said Richard Hunter, head of markets at trading firm Interactive Investor.
"The current fear is that the package could actually overheat the economy, and the meeting of the Federal Reserve later in the week will need to allay that concern."
- Key figures around 2035 GMT -
New York - Dow: UP 0.5 percent at 32,953.46 (close)
New York - S&P 500: UP 0.7 percent at 3,968.94 (close)
New York - Nasdaq: UP 1.1 percent at 13,459.70 (close)
EURO STOXX 50: DOWN 0.1 percent at 3,829.84 (close)
London - FTSE 100: DOWN 0.2 percent at 6,749.70 (close)
Frankfurt - DAX 30: DOWN 0.3 percent at 14,461.42 (close)
Paris - CAC 40: DOWN 0.2 percent at 6,035.97 (close)
Tokyo - Nikkei 225: UP 0.2 percent at 29,766.97 (close)
Hong Kong - Hang Seng: UP 0.3 percent at 28,833.76 (close)
Shanghai - Composite: DOWN 1.0 percent at 3,419.95 (close)
Euro/dollar: DOWN at $1.1929 from $1.1953 at 2200 GMT
Pound/dollar: DOWN at $1.3897 from $1.3924
Euro/pound: UP at 85.93 pence from 85.84 pence
Dollar/yen: UP at 109.13 yen from 109.03 yen
Brent North Sea crude: DOWN 0.5 percent at $68.90 per barrel
West Texas Intermediate: DOWN 0.4 percent at $65.34 per barrel