Updates prices at 02:43 p.m ET/ 1943 GMT

By Sinéad Carew

NEW YORK Feb 28 (Reuters) -A global equities index fell slightly on Wednesday while Treasury yields edged down and the dollar rose against a basket of currencies on cautionthe day beforeU.S. inflation data that could influence Federal Reserve policy.

January's U.S. personal consumption expenditures price index (PCE), the Fed's preferred inflation measure, is dueon Thursday. Economists polled byReuters poll expect the index to have risen 0.3% on a monthly basis after a 0.2% increase in December.

Traders have already dialedback expectations for Fed interest rate cuts after a slew of strong data, including hot consumer price index (CPI) and producer price index (PPI) readings. They expect aneasing cycle to kickoff in June, compared with the start of 2024 when bets were on March.

"We're on hold until we get the PCE print. The market's going to chop around," said Jack Janasiewicz, portfolio manager and lead porfolio strategist at Natixis Investment Managers Solutions. "Between CPI and PPI there's a narrative that inflation is going to be stickier than expected or even potentially having a modest re-acceleration."

He noted that U.S. stock indexes remained notfar from records reached last week, partly thanks to a better-than-expected fourth-quarter earnings season includinga boost from Nvidia NVDA.O onoptimism about artificial intelligence.

"The market's had every chance to sell off but it'sholding up pretty well," he said. "It's actually been looking past inflation to an extent because earnings has been better than expected."

Other data this week that may shape expectations on Fed policy include a second estimate of gross domestic product, jobless claims and manufacturing activity.

MSCI's gauge of stocks across the globe .MIWD00000PUS shed 0.42% whileon Wall Street at 02:43 p.m. the Dow Jones Industrial Average .DJI fell 142.41 points, or 0.37%, to 38,829.53.

The S&P 500 .SPX dropped 15.39 points, or 0.30%, to 5,062.79 and the Nasdaq Composite .IXIC was down 106.17 points, or 0.66%, at 15,929.12.

European stocks had dipped as lackluster corporate earnings weighed on sentiment with the pan-European STOXX 600 index .STOXX closing down0.35%.

The U.S. dollar rose as investors positioned for U.S. and European inflation data, while the Australian and New Zealand dollars tumbled after New Zealand’s central bank cut its forecast peak for interest rates and Australian consumer price inflation held at a two-year low.

The dollar index =USD gained 0.13% at 103.97, with the euro EUR= down 0.11% at 1.0832.

Against the Japanese yen JPY=, the dollar strengthened 0.12% at 150.68.

U.S. Treasuries yields slid, with the benchmark U.S. 10-year notes US10YT=RR yield down 3.7 basis points to 4.278% from 4.315% late on Tuesday. The 30-year bond US30YT=RR yield fell 2.6 basis points to 4.4144% from 4.44%. The 2-year note US2YT=RR yield, which typically moves in step with rate expectations, fell 6 basis points to 4.6519%, from 4.712% late on Tuesday.

In crypto currencies, bitcoin BTC= surged for a fifth day buoyed by flows into new U.S. spot bitcoin exchange traded products that have driven it up nearly 40% in February, which would mark its largest monthly rally since December 2020.

It was last up more than 7% at $60,939, after hittingits highest level since November 2021.

Gold prices ticked up as traders strapped in for economic data and comments from U.S. central bank officials.

Spot gold XAU= added 0.08% to $2,031.22 an ounce.

In commodities, U.S. crude oil settled down while Brent barely gained as traders worried the Fed would be slow to cut rates. Growing U.S. crude stockpiles added pressure.

U.S. crude CLc1 settled down 0.42%at $78.54per barrel while Brent LCOc1 finished at $83.68,up 0.04%on the day.

Reporting by Tom Wilson in London and Ankur Banerjee in Singapore; Editing by Muralikumar Anantharaman, Jamie Freed, Tomasz Janowski, Nick Macfie, Aurora Ellis and David Gregorio

To read Reuters Markets and Finance news, click on https://www.reuters.com/finance/markets For the state of play of Asian stock markets please click on: 0#.INDEXA