GLOBAL MARKETS-European stocks slip, dollar steady as investors assess Israel-Iran truce, eye US data

(Recasts throughout with updated moves, context, analyst comment)

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Crude oil hovers near multi-week lows as supply worries recede

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US stock futures flat after rally on Wall Street overnight

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Two-year Treasury yields at fresh multi-week low

By Kevin Buckland and Linda Pasquini

TOKYO/GDANSK, June 25 (Reuters) -

European shares turned lower and crude oil held not far from multi-week lows on Wednesday, as investors assessed whether a

ceasefire

between Israel and Iran would hold even as immediate worries about an energy shock receded.

The dollar languished close to an almost four-year low versus the euro, with two-year U.S. Treasury yields holding at 1-1/2-month troughs as lower oil prices reduced the risk to bonds from an inflation spike.

At a

NATO summit

on Wednesday, U.S. President Donald Trump

basked

in the quick end to the war between Iran and Israel, saying he now expected a relationship with Tehran that would preclude rebuilding its nuclear programme despite

uncertainty over how much damage

was indeed inflicted by U.S. airstrikes.

With the shaky truce

so far holding,

investors turned their focus back to the U.S. economy and monetary policy, after a series of U.S. macroeconomic data overnight showed possibly weaker than expected growth in the world's largest oil consumer, bolstering expectations of Federal Reserve rate cuts this year.

Europe's Stoxx 600 index eased 0.3% after opening a touch higher. S&P 500 futures were flat, while Nasdaq futures edged up 0.2%.

"I think the Fed is back in focus today after Powell's testimony yesterday, but also because we had de-escalation in the Middle East," said Samy Chaar, chief economist at Lombard Odier. "Now the core focus is what happens to U.S. rates and what happens to U.S. macro."

Federal Reserve Chair Jerome Powell said on Tuesday that higher tariffs could begin raising inflation this summer, a period that will be key to the U.S. central bank considering possible rate cuts.

Markets continue to price in a roughly 19% chance that the Fed will cut rates by a quarter point in July, according to the CME FedWatch tool.

Meanwhile, brent crude rose 0.8% to $67.65 per barrel, paring gains from earlier in the day but still bouncing from a plunge of as much as $14.58 over the previous two sessions. U.S. West Texas Intermediate crude was up by as much to trade at $64.87 per barrel.

Prices had rallied to five-month highs after the U.S. bombed Iran's nuclear facilities over the weekend.

"While concerns regarding Middle Eastern supply have diminished for now, they have not entirely disappeared, and there remains a stronger demand for immediate supply," analysts at ING wrote in a note to clients.

Regardless, the yield on two-year U.S. Treasury was at its lowest since May 8 at 3.7868% on reduced risks from a hike in inflation, while Asian shares closed the session higher.

Japan's Nikkei rose 0.4% to

its highest closing level

in more than four months on Wednesday.

Hong Kong's Hang Seng climbed 1.3% and mainland Chinese blue chips gained 1.44%, closing at their highest level since March 20.

An MSCI index of global stocks held steady after pushing to a record high overnight.

The euro slipped 0.1% to $1.1599, still close to the overnight high of $1.1641, a level not seen since October 2021, while the U.S. dollar index, which measures the currency against six major counterparts, was edging higher at 98.113.

Investors were awaiting U.S. government data on domestic crude and fuel stockpiles due on Wednesday.

The focus was also on the Commerce Department's final take on first-quarter GDP due on Thursday, as well as Friday's Personal Consumption Expenditures report that will help determine the economic effects of President Donald Trump's tariffs that have unnerved global markets this year.

(Reporting by Kevin Buckland in Tokyo and Linda Pasquini in Gdansk; editing by Sam Holmes, Mark Potter and Mark Heinrich)