GLOBAL MARKETS-Stocks slip, dollar rises ahead of US inflation data

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(Updates prices at 02:43 p.m ET/ 1943 GMT)

By Sinéad Carew

NEW YORK Feb 28 (Reuters) - A global equities index fell slightly on Wednesday while Treasury yields edged down and the dollar rose against a basket of currencies on caution the day before U.S. inflation data that could influence Federal Reserve policy.

January's U.S. personal consumption expenditures price index (PCE), the Fed's preferred inflation measure, is due on Thursday. Economists polled by Reuters poll expect the index to have risen 0.3% on a monthly basis after a 0.2% increase in December.

Traders have already dialed back expectations for Fed interest rate cuts after a slew of strong data, including hot consumer price index (CPI) and producer price index (PPI) readings. They expect an easing cycle to kick off in June, compared with the start of 2024 when bets were on March.

"We're on hold until we get the PCE print. The market's going to chop around," said Jack Janasiewicz, portfolio manager and lead porfolio strategist at Natixis Investment Managers Solutions. "Between CPI and PPI there's a narrative that inflation is going to be stickier than expected or even potentially having a modest re-acceleration."

He noted that U.S. stock indexes remained not far from records reached last week, partly thanks to a better-than-expected fourth-quarter earnings season including a boost from Nvidia on optimism about artificial intelligence.

"The market's had every chance to sell off but it's holding up pretty well," he said. "It's actually been looking past inflation to an extent because earnings has been better than expected."

Other data this week that may shape expectations on Fed policy include a second estimate of gross domestic product, jobless claims and manufacturing activity.

MSCI's gauge of stocks across the globe shed 0.42% while on Wall Street at 02:43 p.m. the Dow Jones Industrial Average fell 142.41 points, or 0.37%, to 38,829.53.

The S&P 500 dropped 15.39 points, or 0.30%, to 5,062.79 and the Nasdaq Composite was down 106.17 points, or 0.66%, at 15,929.12.

European stocks had dipped as lackluster corporate earnings weighed on sentiment with the pan-European STOXX 600 index closing down 0.35%.

The U.S. dollar rose as investors positioned for U.S. and European inflation data, while the Australian and New Zealand dollars tumbled after New Zealand’s central bank cut its forecast peak for interest rates and Australian consumer price inflation held at a two-year low.

The dollar index gained 0.13% at 103.97, with the euro down 0.11% at 1.0832.

Against the Japanese yen, the dollar strengthened 0.12% at 150.68.

U.S. Treasuries yields slid, with the benchmark U.S. 10-year notes yield down 3.7 basis points to 4.278% from 4.315% late on Tuesday. The 30-year bond yield fell 2.6 basis points to 4.4144% from 4.44%. The 2-year note yield, which typically moves in step with rate expectations, fell 6 basis points to 4.6519%, from 4.712% late on Tuesday.

In crypto currencies, bitcoin surged for a fifth day buoyed by flows into new U.S. spot bitcoin exchange traded products that have driven it up nearly 40% in February, which would mark its largest monthly rally since December 2020.

It was last up more than 7% at $60,939, after hitting its highest level since November 2021.

Gold prices ticked up as traders strapped in for economic data and comments from U.S. central bank officials.

Spot gold added 0.08% to $2,031.22 an ounce.

In commodities, U.S. crude oil settled down while Brent barely gained as traders worried the Fed would be slow to cut rates. Growing U.S. crude stockpiles added pressure.

U.S. crude settled down 0.42% at $78.54 per barrel while Brent finished at $83.68, up 0.04% on the day. (Reporting by Tom Wilson in London and Ankur Banerjee in Singapore; Editing by Muralikumar Anantharaman, Jamie Freed, Tomasz Janowski, Nick Macfie, Aurora Ellis and David Gregorio)