GLOBAL MARKETS-Wall Street extends July rebound, led by tech and energy

(Updates to afternoon U.S. trading)

* U.S. stocks jump, led by Apple, Exxon

* Oil futures up 2-3%

* U.S. dollar index dips

* Longer-term Treasury yields decline

By Lawrence Delevingne

July 29 (Reuters) - U.S. stocks extended their July rebound on Friday, with the dollar and some longer-term Treasury yields dipping, as traders acted on positive corporate news despite increased labor costs and other inflation indicators.

Positive forecasts from Apple Inc and Amazon.com Inc showed resilience in giant companies to survive an economic downturn, with hopes of a less aggressive monetary policy boosting sentiment.

The two largest U.S. oil companies, Exxon Mobil and Chevron Corp, also posted record revenue on Friday, bolstered by surging crude oil and natural gas prices.

The Dow Jones Industrial Average rose 0.58%, to 32,717.99, the S&P 500 gained more than 1%, to 4,115.48 and the Nasdaq Composite added 1.35%, to 12,327.38.

U.S. labor costs increased strongly in the second quarter as a tight jobs market continued to boost wage growth, which could keep inflation elevated.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, also rose 1.1% last month, the U.S. Commerce Department said on Friday.

As inflation surges across major markets and central bankers scramble to raise rates without killing off growth, riskier markets like stocks have tended to react positively to any perceived softening in sentiment on the part of policymakers.

After Thursday data showed the U.S. economy contracted in the second quarter, stocks rose as traders bet rates would rise more slowly. Euro zone numbers on Friday, meanwhile, beat expectations, yet recession fears are mounting as energy inflation continues to bite in the face of Russia's invasion of Ukraine.

"Our view is that earnings for all equity classes likely will peak in 2022 and move lower as the economy weakens, revenue growth stalls and input costs remain elevated," strategists with the Wells Fargo Investment Institute wrote in a note on Thursday.

The MSCI World index was last up about 0.9%, on course for its best month since November 2020, buoyed by broad gains across European markets, with the STOXX Europe 600 up around 1.3%.

Despite the positive end to the month for stocks, Mark Haefele, chief investment officer at UBS Global Wealth Management, said investors should proceed with caution, noting: "In the near term, we think the risk-reward for broad equity indexes will be muted. Equities are pricing in a 'soft landing,' yet the risk of a deeper 'slump' in economic activity is elevated."

Some of that concern had been evident in Asian stock markets overnight, after Beijing omitted reference to its full-year GDP growth target following a high-level Communist Party meeting.

MSCI's broadest index of Asia-Pacific shares outside Japan closed down 0.55%.

Amid contracting U.S. gross domestic product, the yield on benchmark 10-year notes dipped to 2.636%, from 2.681% late on Friday. But Treasury yields at the short end edged higher on Friday after data on labor costs and wage growth suggested inflation remains elevated. The 2-year note yield increased to 2.8905%, from 2.877%.

The U.S. dollar rebounded from a three-week low in choppy trading on Friday, as the round of U.S. economic data suggested more inflation and higher interest rates. The dollar was last down about 0.2% against a basket of its major peers - still on course for a second month of gains.

Futures markets now predict that U.S. interest rates will peak by December this year, rather than June 2023, and the Federal Reserve will cut interest rates by nearly 50 bps next year to support slowing growth. [0#FF:]

"Strong hiring and falling GDP mean an unsustainable collapse in productivity. The labor market should slow quickly, soon," Bank of America economists Ethan Harris and Aditya Bhave wrote in a note Friday. "The Fed is likely to respond slowly to a recession. We think market optimism about a dovish Fed pivot is premature."

Across commodities, Brent crude futures rose about 2.6%, while U.S. West Texas Intermediate crude extended early gains, up 2.4%, as concerns about supply shortages ahead of the next meeting of OPEC ministers offset doubts around the economic outlook.

Spot gold gained around 0.6% to $1,765.8 an ounce, a more than three-week high, supported by a softer dollar and bets that the Federal Reserve may cool the pace of rate hikes as economic risks deepen.

(Reporting by Lawrence Delevingne in Boston and Simon Jessop in London; editing by Mark Heinrich and Nick Zieminski)