GLOBAL MARKETS-Bond yields, oil fall amid hopes for Iran deal; stocks up with Nvidia results ahead

* Treasury yields fall while US stocks up

* Investors await Nvidia (NVDA) results after bell

* Oil prices drop sharply (Updates to afternoon)

By Caroline Valetkevitch and Alun John

NEW YORK/LONDON, May 20 (Reuters) - U.S. Treasury yields and oil prices fell on Wednesday as hopes increased that the U.S. is nearing a deal with Iran to end the war in the Middle East, while major stock indexes rose ahead of closely watched results from Nvidia (NVDA).

Investors continued to monitor headlines for signs of progress in U.S. negotiations with Iran to end the war. U.S. President Donald Trump said on Wednesday that negotiations with Iran were in the final stages, while warning of further attacks unless Iran agrees to a deal. Trump also said the United States was willing to wait a few days for the "right answer" from Iran. The U.S. dollar fell from a six-week high, while U.S. crude fell $5.89 to settle at $98.26 a barrel. Brent dropped $6.26 to settle at $105.02.

There were also tentative signs of easing pressure from the Gulf on Wednesday, as two Chinese oil tankers exited the Strait of Hormuz, shipping data showed.

The yield on benchmark U.S. 10-year notes fell 9.4 basis points to 4.576%, from 4.669% late on Tuesday. Yields had risen to multi-year highs recently on war-driven inflation fears.

Nasdaq led gains on Wall Street, while consumer discretionary was up the most among S&P 500 sectors.

"There's renewed positive sentiment because oil prices are down, yields are down," said Jake Dollarhide, CEO of Longbow Asset Management in Tulsa, Oklahoma.

But, he said, "there is pessimism on the horizon because higher oil prices for longer put the Fed in a corner."

Fed funds futures traders are pricing in roughly 50% odds that the Federal Reserve will raise rates by December - a sharp reversal from before the Iran war began in late February, when markets had expected two cuts this year.

The Dow Jones Industrial Average rose 581.66 points, or 1.18%, to 49,945.54, the S&P 500 rose 68.20 points, or 0.93%, to 7,421.81 and the Nasdaq Composite rose 344.12 points, or 1.33%, to 26,214.83.

MSCI's gauge of stocks across the globe rose 9.25 points, or 0.85%, to 1,101.04.

The pan-European STOXX 600 index rose 1.46%.

Longer-dated bonds have also sold off in Europe and Japan, but, as with Treasuries, they found some relief on Wednesday.

Germany's 10-year yield, the euro zone benchmark, fell 3 basis points from Tuesday's 15-year high to 3.16%.

Benchmark 10-year U.S. Treasury yields reached a 16-month high on Tuesday, while 30-year yields hit their highest level since 2007.

NVIDIA RESULTS AHEAD Nvidia is due to report first-quarter earnings after the U.S. market close. Expectations remain high, with revenue forecast to jump nearly 80% to about $79 billion, according to the median estimate in an LSEG survey of analysts. Nvidia (NVDA) shares were up 0.9%. Earlier, Samsung shares fell as much as 4.4% before closing near flat. Samsung Electronics' (SSNLF) union said it would suspend a strike set to begin on Thursday after the two sides reached a tentative pay deal, potentially averting action that threatened to disrupt the production of AI and other chips. Other chip stocks were doing well ahead of the Nvidia (NVDA) results, with an index of semiconductors up 3.8%.

In currency markets, the dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.22% to 99.09, with the euro up 0.22% at $1.163. Against the Japanese yen, the dollar weakened 0.14% to 158.81.

Spot gold rose 1.3% to $4,539.60 an ounce. (Reporting by Caroline Valetkevitch in New York and Alun John in London; additional reporting by Stella Qiu; Editing by Mark Potter, Kirsten Donovan, Nia Williams and Nick Zieminski)