GLOBAL MARKETS-Stocks fall and oil prices rise as fears persist over Middle East war

* Stocks continue to slide as Trump fails to calm markets

* US Treasury yields hit highest since July as bonds fall

* Analyst: 'Words alone aren't cutting it right now' (Updates prices throughout, adds fresh analyst comments, U.S. market open)

By Chibuike Oguh and Harry Robertson

NEW YORK/LONDON, March 27 (Reuters) - Global stock markets fell and oil prices rose on Friday as fears over the Middle East conflict persisted, despite U.S. President Donald Trump's extension of a deadline for Iran to reopen the Strait of Hormuz.

Iran gave no direct indication that it was ready for negotiation, and its Islamic Revolutionary Guard Corps reiterated it would continue to try to disrupt shipping in the region.

On Wall Street, all three main indexes were trading lower with consumer discretionary, financial and technology shares driving losses. Energy, consumer staples and utilities gained.

The Dow Jones Industrial Average fell 0.90%, the S&P 500 lost 0.88% and the Nasdaq Composite shed 1.33%.

The pan-European STOXX 600 index dropped 1%. Germany's DAX index fell 1.4% while London's FTSE 100 index shed 0.3%.

MSCI's index of Asian shares excluding Japan fell 0.8% overnight. MSCI's gauge of stocks across the globe fell 0.93%.

"Words alone aren't cutting it right now, with President Trump's extension of the pause on Iran energy strikes failing to lift the mood in any meaningful way," Matt Britzman, senior equity analyst, Hargreaves Lansdown, said. "Tangible evidence of progress is what's needed."

NASDAQ VEERS INTO CORRECTION TERRITORY

The tech-focused Nasdaq Composite veered into correction territory after dropping 2.4% on Thursday, leaving the index down nearly 11% from its record-high close in late October.

"The unbridled optimism that propelled Nasdaq to all-time highs in the fourth quarter is fading as the macro backdrop sours and uncertainty about the impact of AI across the tech ecosystem clouds the horizon," James St. Aubin, chief investment officer at Ocean Park Asset Management, said. Brent crude futures rose 2.36% to $110.55 a barrel. U.S. West Texas Intermediate futures were up 3.56% at $97.84.

"Buy the dip; chaos creates opportunities for patient long-term investors," Talley Leger, chief market strategist at The Wealth Consulting Group, said.

BOND YIELDS RISE

Government bond yields rose as investors grappled with a potential inflationary shock that could force central banks to raise interest rates. Yields rise as prices fall and vice versa.

The 10-year U.S. Treasury yield, which sets the tone for borrowing costs around the world, rose more than 2 basis points to 4.4398%.

Money markets now see a roughly 60% chance the U.S. Federal Reserve raises rates this year, a sharp change from late February when traders were betting on two cuts in 2026.

Germany's 10-year bond yield rose to its highest level since 2011 at 3.13%.

In currencies, the U.S. dollar was slightly higher against the major peers including the Japanese yen and Swiss franc.

The dollar was up 0.06% to 159.865 against the yen and up 0.26% to 0.79645 versus the Swiss franc. The euro was up 0.03% at $1.153075. The U.S. dollar index, which tracks the currency against six peers, rose 0.07% for a fourth straight session of gains.

Spot gold was up 3% to $4,510.09 an ounce.

(Reporting by Chibuike Oguh in New York and Harry Robertson in London; Editing by Christopher Cushing, Sonali Paul, Chizu Nomiyama and Andrew Heavens)