GLOBAL MARKETS-Stocks fall, US yields rise after strong US data

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Wall Street stocks finish lower

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European stocks rise for second-straight session

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Benchmark 10-year Treasury yields hit eight-month high

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US dollar index rises

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Oil prices settle higher

(Updates prices throughout with US markets close, oil and gold settlement)

By Chibuike Oguh

NEW YORK, Jan 7 (Reuters) - Global stocks lost ground while U.S. Treasury yields edged higher on Tuesday after data showed the American economy remained resilient, indicating the Federal Reserve could cut interest rates fewer times this year than the market had been expecting.

On Wall Street, all three main indexes finished lower, with technology, consumer discretionary, and communication services stocks among the biggest losers. Energy and healthcare stocks advanced.

U.S. services sector activity accelerated in December, beating expectations, while a measure of prices paid for inputs rose to a nearly two-year high, according to data from the Institute for Supply Management.

Labor Department data also showed U.S. job openings unexpectedly increased in November, although a softening in hiring pointed to a slowing labor market.

Markets are currently pricing in the probability of just one Fed cut in 2025, down from two rate cuts in December, according to the CME FedWatch tool.

"The Trump trade has taken a bit of a breather right now because bond yields have been rising," said Wasif Latif, chief investment officer at Sarmaya Partners in New York. "I think the market is beginning to take note that between tariffs and the deficit that there's question marks about how we're going to be able to lower the deficit with all this promised spending coming in terms of tax cuts and other things the new administration wants to implement."

The Dow Jones Industrial Average fell 0.42% to 42,528.36, the S&P 500 fell 1.11% to 5,909.03 and the Nasdaq Composite fell 1.89% to 19,489.68.

European stocks held their gains after rallying on Monday following a report saying President-elect Donald Trump's aides are considering narrower tariffs than previously thought.

The European STOXX 600 index rose 0.32% for its second consecutive gain. It rose 1.75% on Monday following the report on tariffs, which caused shares of automakers to rally. MSCI's gauge of stocks across the globe fell 0.75% to 846.52.

Benchmark 10-year Treasury yields hit an eight-month high, buoyed by data showing the U.S. economy remained strong. The yield on 10-year notes rose 7.5 basis points to 4.691%, having peaked at 4.699%, the highest since April 26.

"The 10-year continues to inch higher and the equity market hasn't picked up on the fact that bond yields are rising, and rising long-term yields is not good for equities," Latif added.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.33% to 108.67, with the euro down 0.47% at $1.0341.

The greenback rose to a near six-month peak against the Japanese yen after the U.S. data. It was up 0.23% at 157.96 yen . Earlier in the global session, the dollar hit its highest since July at 158.425 yen. Oil prices settled higher, driven by concerns over limited supply from Russia and Iran because of Western sanctions and expected higher Chinese demand. Brent crude futures settled up 0.98% at $77.05 a barrel. U.S. West Texas Intermediate (WTI) crude finished at $74.25 a barrel, up 0.94%. Spot gold rose 0.53% to $2,649.38 an ounce. U.S. gold futures settled 0.7% higher at $2,665.40. (Reporting by Harry Robertson in London and Chibuike Oguh in New York; editing by Barbara Lewis, Chris Reese and Rod Nickel)