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LONDON (Reuters) -European stock indexes fell from recent record highs on Monday, and Wall Street looked set for losses, as traders grappled with an uncertain economic outlook and waited for U.S. inflation data later in the week.

U.S. stocks started to fall from record highs on Friday, in a move analysts attributed to profit-taking, after U.S. payrolls data presented a mixed picture but maintained expectations for a Federal Reserve rate cut in June.

Traders are now focused on U.S. inflation data due on Tuesday, which could change expectations for when major central banks will begin cutting rates.

At 1236 GMT, the MSCI World Equity index was down 0.3%, having hit a new all-time high on Friday.

The pan-European STOXX 600, which also hit an all-time high on Friday, was down 0.5% . London’s FTSE 100 was down 0.5% and Germany’s DAX was down 0.7%.

Amelie Derambure, senior multi-asset portfolio manager at Amundi, said Monday’s downturn could be due to uncertainty about the economic outlook, and high valuations in stocks.

“There are some elements on the macro outlook that are maybe not as clear as one was willing to believe,” she said.

Last week, comments from Fed Chair Jerome Powell and European Central Bank policymakers raised expectations that interest rate cuts will begin in summer, helping push stock indexes to new highs.

But Wall Street futures on Monday pointed to a pullback, with Nasdaq e-minis down 0.6% and S&P 500 e-minis down 0.5%.

FATIGUE

Derambure said there was “fatigue” in stocks, pointing to a split in the trajectories of the so-called “Magnificent Seven” group of U.S. technology stocks, which have rallied strongly in recent years. A slump in Tesla (NASDAQ:TSLA) this year has seen it diverge from the group.

“To us, there are some excesses in the markets so we want to be a bit more cautious,” she said.

“We believe it’s all priced for perfection and the reality might be slightly different.”

Tuesday’s U.S. consumer price index (CPI) report for February is forecast to rise 0.4% for the month and keep the annual pace steady at 3.1%. Core inflation is seen rising 0.3%, which will nudge the annual pace down to the lowest since early 2021 at 3.7%.

The U.S. 10-year yield was down by around one basis point at 4.0807%.

Euro zone government bond yields were mostly slightly higher, with German 10-year yield up by one basis point at 2.281% after last week seeing its biggest weekly fall since December.

The U.S. dollar index was up 0.1% at 102.76, having dropped more than 1% last week, and the euro was steady at $1.09355.

The yen edged higher after Reuters reported that a growing number of Bank of Japan policymakers are warming to the idea of ending negative rates this month.

The dollar was down 0.2% against the yen, with the pair at 146.845.

Data released on Monday showed Japan was not in recession after economic growth was revised up to an annualised 0.4% for the December quarter.

Chinese stocks gained after data over the weekend showed a bounce in inflation.

Oil prices were down, having fallen last week due to concerns about slow demand in China. Brent futures were down 0.3% at $81.83 a barrel, while U.S. West Texas Intermediate (WTI) was down 0.4% at $77.69 a barrel.

The decline in the dollar and bond yields has been supportive of non-yielding gold which gained 4.5% last week and was flat at $2177.9 an ounce .

Cryptocurrency bitcoin hit a new all-time high at $72,259 .