European equities moved lower, ending a four-day winning streak, while commodities including gold and silver rallied amid bets central banks will add fresh stimulus to bolster the global economy.
Europe's Stoxx 600 Index finished the day with a decline of 0.7 per cent from the previous close. Germany's DAX index also shed 0.7 per cent, while the UK's FTSE 100 index retreated 0.8 per cent, and France's CAC 40 index slid 0.9 per cent.
"European stocks are taking a breather after the big rally last week and the holiday in the US today," Guillermo Hernandez Sampere, the head of trading at MPPM EK in Eppstein, Germany told Bloomberg.
"We're continuing to see a shift from financials and periphery stocks to safe haven assets such as gold miners. Italian banks will remain losers even with government support because the main opinion is that they'll remain under-capitalised."
Shares of UK homebuilders fell after a report showed a surprise contraction in construction in June, the weakest performance in seven years. At 46.0 in June, down from 51.2 in May, the seasonally adjusted Markit/CIPS UK Construction Purchasing Managers' Index fell below 50 for the first time since April 2013, Markit noted.
"Widespread delays to investment decisions and housing market jitters saw the UK construction sector experience its worst month for seven years in June," Tim Moore, senior economist at Markit, said in a statement.
"Construction firms are at the sharp end of domestic economic uncertainty and jolts to investor sentiment, so trading conditions were always going to be challenging in the run-up to the EU referendum," Moore noted. "However, the extent and speed of the downturn in the face of political and economic uncertainty is a clear warning flag for the wider post-Brexit economic outlook."
Gold and silver moved higher as did nickel, also underpinning mining stocks.
"Brexit has created all sorts of fear and loathing across markets," Commonwealth Bank of Australia analysts including Tobin Gorey, wrote in a note, adding that investors are cutting back on risk, Bloomberg reported. "Gold and silver, as we would expect, benefit the most from safe-haven demand flows."
Indeed, JPMorgan strategists warned investors against chasing the rally in risky assets, according to Reuters.
"We do not believe that we will see a sustained upmove," JPMorgan strategists wrote in a note, Reuters reported. "Positioning is not washed out, market internals are not positive and political uncertainty will linger."
US financial markets were closed for the Fourth of July holiday, with trading set to resume in New York on Tuesday. Stocks futures rose. A key focus this week are the latest US labour market data, with the ADP employment report and weekly jobless claims due on Thursday, followed by the government's nonfarm payrolls report on Friday, which is expected to show a sharp rebound from May's unexpectedly weak numbers.