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Global stocks and oil prices slipped on Monday as a spike in COVID-19 cases and newly recorded deaths in China prompted authorities in the world's second-largest economy to reinstate lockdowns, triggering worries over the economy.

Beijing's most populous district urged residents to stay at home on Monday as the city's COVID case numbers rose, while at least one district in Guangzhou was locked down for five days.

"It looked like zero COVID was moving in the right direction and everyone was excited but the Chinese government is taking some strong action and in the short term there's going to be fits and starts," said Thomas Hayes, chairman of Great Hill Capital in New York.

MSCI's broadest index of world shares fell 0.72%, while European stocks were steady.

On Wall Street, all three major indexes were trading lower, led by a selloff in technology, energy, communication services and consumer discretionary stocks.

The Dow Jones Industrial Average fell 0.13% to 33,700.28, the S&P 500 lost 0.39% to 3,949.94 and the Nasdaq Composite dropped 1.09% to 11,024.51.

Oil prices tumbled to their lowest level since early January on a report that Saudi Arabia was holding talks with OPEC allies to raise output, but oil clawed back some losses after the kingdom denied it. Crude was also hit by concerns of lower Chinese fuel demand.

Brent crude futures for January settled at $87.45,

shedding 17 cents, while U.S. West Texas Intermediate (WTI) crude futures for December settled at $79.73 a barrel, falling 35 cents ahead of the contract's expiry later on Monday.

"With oil, there's always the supply and demand picture and right now the market is looking for some insight on the demand side," said Cliff Hodge, chief investment officer at Cornerstone Wealth in Charlotte, North Carolina.

"Typically oil demand will plummet going into a slowdown or global recession especially this year, which we think is going to be somewhat exacerbated by China," Hodge added.

The U.S. dollar advanced against most major currencies, recouping recent losses, as traders shunned riskier currencies over concerns about the global economic outlook from the COVID curbs in China. The dollar index rose 0.851%, with the euro down 0.82% to $1.0239.

U.S. Treasury yields across most maturities inched higher atthe start of a Thanksgiving holiday-shortened week on concern about further Federal Reserve interest rate hikes. The yield curve remained deeply inverted on concerns the central bank's tightening will weigh on economic growth.

Benchmark 10-year notes rebounded from earlier losses and was at 3.8419%, while the yield on 2-year notes was up at 4.5651%. The yields on long-duration 30-year bonds were still lower at 3.9066%.

Gold prices slipped to their lowest in over a week as the dollar extended gains, while the market's attention turned to the U.S. Federal Reserve's November meeting minutes due this week.

Spot gold dropped 0.7% to $1,738.41 an ounce, while U.S. gold futures fell 0.90% to $1,737.40 an ounce.