GLOBAL MARKETS-US stocks edge up, yields fall as US CPI data cooler than expected

(Updates with closing US markets levels)

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Dow, S&P 500 end barely higher; Nasdaq down

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Dollar was last flat while yields were down

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US January inflation data softer than expected

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Aluminum prices fall after report on tariffs

By Caroline Valetkevitch

NEW YORK, Feb 13 (Reuters) - Wall Street indexes ended mostly with a slight gain while Treasury yields fell on Friday as ?investors digested cooler-than-expected U.S. inflation data for January that some saw ?as underpinning hopes for interest rate cuts.

The U.S. dollar was nearly flat against other currencies. The report showed the U.S. Consumer Price Index rose 2.4% on a yearly ?basis, slightly below the estimated 2.5% increase, according to economists polled by Reuters. The news boosted bets that the ?Federal Reserve will deliver at least two rate cuts this year.

The data followed a ?surprisingly strong U.S. employment report on ?Wednesday. The Fed last month left its benchmark overnight interest rate in the 3.50%-3.75% range.

Tim Holland, chief investment officer at Orion, said the U.S. CPI is ?now closer to the Fed's long-term inflation target of 2% ?than it is to 3%.

"We wonder if market participants might recalibrate their expectations around 2026 interest rate cuts, while we hope falling gasoline and car prices put a bit of a spring ?in the U.S. consumer's step. Either way, it is a ?bit of good ?news as we head into the long holiday weekend," Holland said. On Wall Street, the Dow and S&P 500 ended a choppy session slightly higher, while the Nasdaq eased and the technology sector was down 0.5%. ?The potential for artificial intelligence-driven disruption in the technology space has remained a concern.

The Dow Jones Industrial Average rose ?48.95 points, or 0.10%, to 49,500.93, the S&P 500 rose 3.41 points, or 0.05%, to 6,836.17 and the Nasdaq Composite fell 50.48 points, or 0.22%, to 22,546.67. All three of the major indexes had slight losses for the week.

MSCI's gauge of stocks across the globe fell 2.47 points, or 0.24%, to 1,042.75.

European shares ended down slightly amid the AI concerns. The pan-European ?STOXX 600 ?index closed 0.13% lower at 617.7 points. However, it capped a turbulent week with ?a marginal gain of 0.09%.

While the dollar was little changed, bitcoin was sharply higher in late afternoon, gaining 4.94% to $69,049.69. The dollar ?index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.03% to 96.90, with the euro down 0.01% at $1.1869. Against the Japanese yen, the dollar strengthened 0.01% to 152.75.

The yield on benchmark U.S. 10-year notes fell 5.6 basis points to 4.048%, from 4.104% late on Thursday.

Aluminum prices sank to a one-week low before cutting their losses. Weighing on the prices was a Financial Times report that U.S. President Donald Trump plans to scale back some tariffs on steel and aluminum goods, citing ?people familiar with the matter.

Oil prices settled up slightly, while gold rose as the soft inflation data supported hopes for the Fed to cut rates.

Brent crude futures rose 23 cents to settle at $67.75 a barrel, while U.S. West Texas Intermediate ?crude gained 5c to settle at $62.89.

(Reporting by Caroline Valetkevitch; ?additional reporting by Laura Matthews in New York; Editing by Kim Coghill, Amanda Cooper, Mark ?Potter, Will Dunham and Nick Zieminski)