LONDON - European stock indexes were mostly in the red in early trading on Monday, falling from last week's record highs as traders grappled with uncertainty over the economic outlook and waited for US inflation data later in the week.

US stocks edged down from recent highs on Friday, in a move analysts attributed to profit-taking, after US payrolls data presented a mixed picture but maintained expectations for a Federal Reserve rate cut in June.

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

At 0948 GMT, the MSCI World Equity index was down 0.2 percent on the day, 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 percent. London's FTSE 100 was down 0.3 percent and Germany's DAX was down 0.7 percent.

Amelie Derambure, senior multi-asset portfolio manager at Amundi, said that 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.

Derambure said there is "fatigue" in stocks, pointing to a split in the trajectories of the so-called "Magnificent Seven" group of US technology stocks, which have rallied strongly in recent years. A slump in Tesla 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 on that front," she said.

"We believe it's all priced for perfection and the reality might be slightly different."

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

US Treasury yields have declined in recent weeks, as hopes for a rate cut put downward pressure on yields. The US 10-year yield was down 3 basis points at 4.0672 percent.

Eurozone government bond yields were mostly lower, with German 10-year yield steady at 2.258 percent after last week seeing its biggest weekly fall since December.

The US dollar index was flat at 102.68, having dropped more than 1 percent last week, and the euro was steady at $1.09375.

The yen edged higher as 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 0.4 percent against the yen, with the pair at 146.52.

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

Oil prices recovered. Brent futures were up 0.4 percent at $82.42 a barrel, while US West Texas Intermediate (WTI) was up 0.35 percent at $78.28 a barrel.

The decline in the dollar and bond yields has been supportive of non-yielding gold which was up at $2,180.63 an ounce, having surged 4.5 percent last week to record peaks. Cryptocurrency bitcoin hit a new all-time high at $71,836.