World shares came off record highs on Monday as caution over rising coronavirus cases saw some profit-taking from investors, while elevated Treasury yields helped the dollar hit its highest levels in over two and a half weeks.

Worldwide coronavirus cases surpassed 90 million on Monday, according to a Reuters tally.

European shares dipped in early trading, with rising coronavirus cases across the continent and China dragging down commodity stocks. Germany’s DAX lost 0.55%, Britain’s FTSE 100, Italy’s FTSE MIB, and France’s CAC 40 fell about half a percent each, and Spain’s IBEX fell 0.2%.[.EU]

The pan-European STOXX 600 index was down 0.3%.

With Asian stock markets also lower, MSCI’s All Country World index, which tracks stocks across 49 countries, was down 0.2%, just off Friday’s record high.

Futures for the S&P 500 slipped 0.6% from record highs, after gaining 1.8% last week.

“There was an awful lot of optimism about prospects for stimulus with the Biden administration winning those two Georgia Senate seats,” said Michael Hewson, chief markets analyst at CMC Markets in London, noting Friday’s record highs that followed the Democrats winning control of the U.S. Senate.

“Friday’s (U.S.) payrolls report was disappointing, underscoring the need for more significant fiscal response. But as we head into week two (of the new year), I think some of that optimism has been tempered a little bit with profit-taking.”

In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.2%, having surged 5% last week to record highs. Japan’s Nikkei was closed for a holiday after ending at a 30-year high on Friday.

South Korea reversed an early jump to fall 0.1%, and Chinese blue chips fell 1%.

Last week, Wall Street bankers warned of toppy stock markets and a looming retreat after exuberance from unprecedented economic stimulus had led to “frothy” asset prices.

“I think there’s a perception perhaps markets are getting slightly ahead of themselves,” Hewson said.

Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a note to clients that he didn’t see valuations as a barrier for the equity rally to continue, “especially against the backdrop of continued policy stimulus and the rollout of vaccines.”

For a graphic on Stock valuations:

Longer-term Treasury yields were at their highest since March after Friday’s weak jobs report fanned speculation of more U.S. fiscal stimulus now that the Democrats have control of the government.

President-elect Joe Biden is due to announce plans for “trillions” in new relief bills this week, much of which will be paid for by increased borrowing.

At the same time, the Federal Reserve is sounding content to put the onus on fiscal policy. Vice Chair Richard Clarida said there would be no change soon to the $120 billion of debt the Fed is buying each month.

With the Fed reluctant to purchase more longer-dated bonds, 10-year Treasury yields jumped almost 20 basis points last week to 1.12%, the biggest weekly rise since June.

Mark Cabana at BofA warned stimulus could further pressure the dollar and cause Fed tapering to begin later this year.

“An early Fed taper creates upside risks to our year-end 1.5% 10-year Treasury target and supports our longer-term expectations for neutral rates moving towards 3%,” he said in a note to clients.

The poor payrolls report will heighten interest in U.S. data on inflation, retail sales and consumer sentiment.

Earnings will also be in focus as JP Morgan, Citigroup and Wells Fargo are among the first companies to release fourth-quarter results on Jan. 15.

The climb in yields in turn offered some support to the dollar, which rose to its highest in over two weeks at 90.520 against a basket of currencies from last week’s low of 89.206.

The euro fell to its lowest since Dec. 23 at $1.2155, from a recent higher of $1.2349, breaking support around $1.2190. The dollar also gained to 104.18 yen from a trough of 102.57 hit last week.

Gold, which pays no interest, rose 0.1% to $1,850 an ounce after skidding as low as $1,816. [GOL/]

Brent crude oil prices fell, hit by renewed concerns about global fuel demand amid tough coronavirus lockdowns across the globe, as well as the stronger dollar.[O/R]

Brent crude futures fell 1.3% to $55.25. U.S. crude futures lost 0.7% to $51.84 a barrel.