GLOBAL MARKETS-Bond yields dip, stocks nearly flat; focus on inflation, Trump

*

S&P 500 last nearly flat after losing early gains

*

U.S. bond yields ease slightly after recent surge

*

US CPI data on Weds key for Fed outlook

(Updates to late US morning, adds NEW YORK dateline)

By Caroline Valetkevitch and Harry Robertson

NEW YORK/LONDON Jan 14 (Reuters) - U.S. Treasury yields dipped on Tuesday after data showed U.S. producer prices rose less than expected in December, while stock indexes were little changed as investors remained cautious ahead of U.S. consumer price data on Wednesday and President-elect Donald Trump's inauguration next week.

The U.S. producer price index climbed 0.2% month-on-month in December, below expectations for a 0.3% increase and down from 0.4% in November.

Investors have been worried about persistent U.S. inflation. The PPI report did not change the view that the Federal Reserve would not cut interest rates again before the second half of this year, and investors still await the more closely watched U.S. consumer price index report, which is due on Wednesday.

CPI data is expected to show month-on-month inflation held at 0.3% in December while the year-on-year figure climbed to 2.9%, from 2.7% in November.

The potential for tariffs that could boost inflation once Trump is in office also hangs over the market.

Most stock indexes were higher following the PPI report but the S&P 500 and Nasdaq lost gains by late U.S. morning.

"There's a lot of concern over the Trump platform and whether it will be inflationary, both from a tariff perspective as well as from a tax reduction perspective," said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.

Bloomberg reported that Trump's aides were weighing ideas including increasing tariffs by 2% to 5% a month to increase U.S. leverage and to try to avoid an inflationary spike.

The Dow Jones Industrial Average rose 42.61 points, or 0.10%, to 42,339.90, the S&P 500 fell 8.42 points, or 0.15%, to 5,827.34 and the Nasdaq Composite fell 40.25 points, or 0.21%, to 19,047.85.

MSCI's gauge of stocks across the globe rose 1.19 points, or 0.14%, to 832.98. The STOXX 600 index was down 0.11%.

U.S. fouth-quarter 2024 earnings get rolling on this week, with results from some of the biggest U.S. banks due. Lenders expected to report stronger earnings, fueled by robust dealmaking and trading.

The yield on the benchmark 10-year Treasury note eased marginally, but it remained close to its 14-month high.

It was last down slightly at 4.790% after hitting 4.805% overnight, the highest since November 2023.

Higher yields have weighed on equities by making bonds relatively more attractive and increasing the cost of borrowing for companies. The Russell 2000 index of smaller U.S. stocks is down around 11% from a peak in November.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.1% to 109.31, with the euro up 0.46% at $1.0292.

Against the Japanese yen, the dollar strengthened 0.25% to 157.87.

Oil prices eased from the previous day's four-month highs.

U.S. crude fell 1.23% to $77.84 a barrel and Brent fell to $80.27 per barrel, down 0.93% on the day.

In Asia overnight, Japan's Nikkei slumped 1.8% as investors shed chip stocks and worried about a possible Bank of Japan interest rate hike.

Bank of Japan Deputy Governor Ryozo Himino, in a speech to Japanese business leaders, left the door open to a rate hike at the conclusion of the next policy meeting on Jan. 24. (Reporting by Caroline Valetkevitch in New York and Harry Robertson in London, Editing by Christina Fincher and Angus MacSwan)