NEW YORK/LONDON  MSCI's global equity gauge rose slightly on Tuesday while US Treasury yields fell from a more than four-month high as investors anxiously awaited a US inflation reading and the kick-off of first-quarter earnings.

Oil prices dipped for a second straight day as talks on a ceasefire in Gaza continued but Egyptian and Qatari mediators met resistance. On Monday, Brent had posted its first decline in five sessions and US crude its first in seven days.

The US dollar was little changed with investors cautious ahead of US inflation data, due out on Wednesday, even as the yen hovered near multi-decade lows, keeping traders on alert for any possible action from Japan to prop up its currency.

As they seek clues about the timing and depth of the US Federal Reserve's (Fed) expected rate cuts, investors will closely monitor the March reading of the US consumer price index (CPI). It is expected to show a rise in headline inflation to 3.4% year-on-year, from 3.2% in February.

The data will be followed by the first reports of quarterly results from big banks on Friday.

"We're on the cusp of an inflation reading and on the cusp of earnings reports. Maybe some investors want to position a little bit more cautiously going into these pivotal events," said Jeff Kleintop, the chief global investment strategist of Schwab.

"While the stock market did great in the first quarter, were earnings strong enough to justify that and is the guidance from business leaders going to be strong enough to justify that more robust outlook for growth that markets have already priced in?"

After opening higher, stocks lost steam as the morning progressed before regaining some ground by the close.

"With valuations elevated and questions surrounding if and when the Fed will cut rates, the markets are pricing in absolute perfection," said Gene Goldman, the chief investment officer of Cetera Investment Management. "A higher-than-expected CPI reading could squash any optimism about Fed rate cuts."

On Wall Street, the Dow Jones Industrial Average fell 9.13 points, or 0.02%, to 38,883.67, the S&P 500 gained 7.52 points, or 0.14%, to 5,209.91, and the Nasdaq Composite increased 52.68 points, or 0.32%, to 16,306.64.

MSCI's gauge of stocks across the globe rose 1.32 points, or 0.17%, to 779.36 after earlier falling around 0.5%.

Europe's STOXX 600 index closed down 0.61% as investors looked ahead to Thursday's European Central Bank policy announcement, with markets expected to monitor president Christine Lagarde's comments for hints of a June rate cut.

US Treasury yields declined as investors waited for US inflation data.

Expectations for US rate cuts have been receding on robust economic activity. Traders were pricing in a roughly 56% chance for a 25-basis-point rate cut in June versus 61.5% a week ago, according to CME Group's FedWatch tool.

The yield on benchmark US 10-year notes fell 6.6 basis points to 4.358%, from 4.424% late on Monday, while the 30-year bond yield fell 5.7 basis points to 4.4964%, from 4.553% late on Monday.

The two-year note yield, which typically moves in step with interest rate expectations, fell 5.1 basis points to 4.7384%, from 4.789% late on Monday.

In currencies, the dollar index fell 0.02% to 104.09, with the euro down 0.01% at US$1.0857. Against the Japanese yen, the dollar weakened 0.03% to 151.74.

Japanese Finance Minister Shunichi Suzuki said authorities would not rule out any options in dealing with excessive yen moves, repeating his warning that Tokyo is ready to act against the currency's recent sharp declines.

In energy, while Middle East uncertainty continued, the US Energy Information Administration (EIA) said US crude oil output is set to grow slightly more than earlier estimates this year and next, and the EIA hiked its global and domestic oil price forecasts.

US crude settled down 1.39%, or US$1.20, at US$85.23 a barrel, while Brent settled at US$89.42 per barrel, down 1.06%, or US$0.96 on the day.

Meanwhile, spot gold hit a record high for the eighth session in a row, supported by central bank buying and heightened geopolitical tensions, according to analysts.

Spot gold added 0.57% to US$2,352.23 an ounce. US gold futures gained 0.84% to US$2,351.40 an ounce.

  - Reuters