GLOBAL MARKETS-U.S. stocks extend sell-off, Treasury yields drop as valuation worries weigh on risk appetite

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Risk-off mood permeates markets

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Nvidia (NVDA) earnings to test AI boom sustainability

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Home Depot (HD) forecasts steeper profit drop, raising consumer health concerns

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Treasury yields dip as safe-haven demand rises

(Updates to U.S. morning trade)

By Stephen Culp

NEW YORK, Nov 18 (Reuters) - Wall Street stocks followed their European counterparts lower on Tuesday, extending a selloff prompted in part by the run-up to Nvidia (NVDA) earnings, which could test the artificial intelligence boom amid mounting valuation concerns.

All three major U.S. stock indexes were sharply lower in early trade, with gold climbing and U.S. Treasury yields dipping as investor risk appetite soured. The S&P 500 is on track for its fourth straight daily loss, which has brought the bellwether index down about 3.5% since November 12.

Chipmaker Nvidia's quarterly results, expected on Wednesday, will be scrutinized for signs that the AI juggernaut, which has provided the muscle for much of the stock market's recent rally, has staying power or whether the fervor surrounding the technology has created a bubble.

In other earnings, home improvement retailer Home Depot (HD) forecast a steeper than expected drop in annual profit, raising concerns about the housing market and the health of the American consumer.

"We're seeing a pretty steep decline," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. Home Depot (HD) "guidance wasn't what was expected today and people are on pins and needles about Nvidia's (NVDA) numbers tomorrow."

"It's Nvidia's (NVDA) customers that you should be more worried about than Nvidia (NVDA) itself," Tuz added.

Official economic indicators that were unavailable during the longest government shutdown in U.S. history are being released, with the Commerce Department's August report of new orders for U.S. factory-made goods gaining 1.4% as expected.

"It's hard to put a lot of credence in the data that's three or four months old now," Tuz said. "We're going into the end of a good year, and with these kind of conflicting data points, why not take a little bit off the table until the dust settles?"

WORLDWIDE SELLOFF DEEPENS

The Dow Jones Industrial Average fell 552.90 points, or 1.20%, to 46,037.34, the S&P 500 fell 72.85 points, or 1.09%, to 6,599.91 and the Nasdaq Composite fell 362.47 points, or 1.60%, to 22,345.60.

European shares tumbled, with German stocks hitting a near five-month low as risk appetite continued to sour due to worries over tech valuations and dimming hopes for a December rate cut from the U.S. Federal Reserve.

MSCI's gauge of stocks across the globe fell 13.79 points, or 1.40%, to 974.02.

The pan-European STOXX 600 index fell 1.92%, while Europe's broad FTSEurofirst 300 index fell 43.69 points, or 1.92%.

Emerging market stocks fell 25.05 points, or 1.80%, to 1,362.80. MSCI's broadest index of Asia-Pacific shares outside Japan closed lower by 1.98%, to 700.63, while Japan's Nikkei fell 1,620.93 points, or 3.22%, to 48,702.98.

U.S. Treasury yields eased on safe-haven demand as the stock selloff extended to its fourth straight day.

The yield on benchmark U.S. 10-year notes fell 2.9 basis points to 4.104%, from 4.133% late on Monday.

The 30-year bond yield fell 0.9 basis points to 4.7269% from 4.736% late on Monday.

The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 5 basis points to 3.56%, from 3.61% late on Monday.

DOLLAR STEADIES, CRYPTO REBOUNDS, GOLD GAINS

The dollar touched a fresh 9-1/2-month high against the yen, but the dollar index steadied amid concerns of stretched stock valuations.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, was flat at 99.54, with the euro down 0.02% at $1.1588. Against the Japanese yen, the dollar weakened 0.03% to 155.2.

Bitcoin reversed course, gaining 1.18% to $92,886.22 after dipping below $90,000, nearly 30% below its peak. Ethereum rose 3.51% to $3,112.58.

Crude prices inched lower as investors weighed the impact of sanctions on Russian oil against an expected supply glut in the coming year.

U.S. crude fell 0.15% to $59.82 a barrel and Brent fell to $63.97 per barrel, down 0.36% on the day.

Gold reversed its slide, turning losses to gains in reaction to the softening greenback after it touched a one-week low.

Spot gold rose 0.28% to $4,055.42 an ounce. U.S. gold futures fell 0.28% to $4,057.00 an ounce.

(Reporting by Stephen Culp; Additional reporting by Scott Murdoch and Lucy Raitano; Editing by Bill Berkrot)