GLOBAL MARKETS-Stocks set for weekly decline on Fed cut expectations

(Updated at 10:37 a.m. ET/1437 GMT)

By Chuck Mikolajczak

NEW YORK, March 15 (Reuters) - A gauge of global stocks was poised to snap a seven-week streak of gains on Friday, while the dollar was on track for its strongest week since mid-January, as recent U.S. inflation data has led to a reassessment for the path of interest rates.

Equities have struggled for upward momentum this week, after readings on U.S. consumer prices and producer prices indicated inflation remains sticky, dampening expectations the U.S. Federal Reserve will cut rates by its June meeting.

Markets are pricing in a 54.9% chance for a rate cut of at least 25 basis points (bps) by the Fed in June, down from 59.5% in the prior session and 73.3% a week ago, according to CME's

FedWatch Tool

. The central bank is widely expected to hold rates steady at its policy meeting next week.

Data on Friday showed U.S.

import prices increased

marginally in February as a surge in the cost of petroleum products was partially offset by modest gains elsewhere, suggesting an improving inflation picture.

"We've taken a breather this week, and that's okay," said Liz Young, head of investment strategy at SoFi in New York.

"Seeing certain stocks go up uninhibited, almost unhinged, makes everybody a little nervous... A breather here, particularly in the names that have seen that big run-up, is healthy."

On Wall Street, the Dow Jones Industrial Average fell 93.81 points, or 0.24%, to 38,810.44, the S&P 500 lost 22.68 points, or 0.44%, to 5,127.80 and the Nasdaq Composite lost 101.22 points, or 0.63%, to 16,026.22.

In addition, a survey from the University of Michigan showed its preliminary reading on consumer sentiment and inflation expectations were little changed in March.

The dollar index gained 0.01% at 103.39, recouping most of the prior week's decline, with the euro up 0.06% at $1.0888. Sterling weakened 0.07% at $1.274.

Against the Japanese yen, the dollar strengthened 0.4% at 148.92. The Bank of Japan is expected to end its negative interest rate policy at its meeting next week.

MSCI's gauge of stocks across the globe fell 3.26 points, or 0.42%, to 769.39 and was poised for its third straight decline, the longest streak since the start of the year.

The STOXX 600 index edged down 0.01%, while Europe's broad FTSEurofirst 300 index fell 0.89 points, or 0.04%.

The yield on benchmark U.S. 10-year notes rose 1.8 basis points to 4.316% after reaching 4.322%, its highest since Feb. 23. The 2-year note yield, which typically moves in step with interest rate expectations, rose 3.4 basis points to 4.7254%

Elsewhere, oil prices succumbed to some profit taking, following strong gains this week amid sharp declines in U.S. crude and fuel inventories, drone strikes on Russian refineries and an increase in energy demand forecasts.

The oil benchmarks were on track toclose out the week with a gain of more than 3%, even as U.S. crude was trading 0.6% lower on the day at $80.77 a barrel and Brent fell 0.5% to $84.96 per barrel.

Bitcoin edged away from an all-time high reached on Thursday, as risk sentiment took a hit.

(Reporting by Chuck Mikolajczak Editing by Marguerita Choy)