GLOBAL MARKETS-US stocks pare gains as trade jitters dampen earnings fervor; gold touches new high

Updates prices

By Stephen Culp

NEW YORK, Oct 15 (Reuters) - Wall Street lost some momentum while gold resumed its ascent on Wednesday as mounting trade tensions between the United States and China dampened investor enthusiasm over upbeat earnings.

A broad rally, driven by rate cut hopes and solid corporate earnings results, sent all three major U.S. stock indexes higher in early trading. But risk sentiment soured as the session progressed.

Crude prices forfeited earlier gains and gold hit new highs as Washington and Beijing ramped up the rhetoric in their ongoing tariff dispute.

President DonaldTrump said he was considering cutting some trade ties with Beijing in response to China not buying U.S. soybeans. This followed China's ramped-up restrictions on crucial rare earth exports.

U.S. Trade Representative Jamieson Greer described those restrictions as a complete repudiation of U.S.-Chinese trade agreements over the past six months, while Treasury Secretary Scott Bessent said he does not believe Beijing wants to be an "agent of chaos."

"There’s fear out there and we really don't know how tariffs and the slower employment is going to affect consumer spending and company financials going forward," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

"I hope they get together and find a solution that is amenable to both parties, because this escalation of this isn't good for markets. It's probably not good for either economy."

Earlier in the session, upbeat third-quarter results from Morgan Stanley MS.N and Bank of America BAC.N buoyed investor sentiment.

The Dow Jones Industrial Average .DJI rose 20.88 points, or 0.05%, to 46,290.91, the S&P 500 .SPX rose 27.04 points, or 0.41%, to 6,671.35 and the Nasdaq Composite .IXIC rose 143.43 points, or 0.64%, to 22,665.13.

European stocks ended higher as upbeat results from France's LVMH LVMH.PA sparked a rally in luxury goods, soothing worries that slowing global economic growth and ongoing tariff wars are dampening corporate health.

MSCI's gauge of stocks across the globe .MIWD00000PUS rose 7.28 points, or 0.74%, to 985.60.

The pan-European STOXX 600 .STOXX index rose 0.57%, while Europe's broad FTSEurofirst 300 index .FTEU3 rose 14.31 points, or 0.64%.

Emerging market stocks .MSCIEF rose 26.33 points, or 1.97%, to 1,365.31. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed higher by 1.99%, to 708.59, while Japan's Nikkei .N225 rose 825.35 points, or 1.76%, to 47,672.67.

The dollar slipped against its peers as market sentiment weakened in the face of the continuing U.S.-China trade skirmish.

The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.28% to 98.79, with the euro EUR= up 0.24% at $1.1633.

Against the Japanese yen JPY=, the dollar weakened 0.37% to 151.27.

U.S. Treasury yields turned higher as investors digested the latest development in the U.S.-China trade dispute.

The yield on benchmark U.S. 10-year notes US10YT=RR rose 2.2 basis points to 4.044%, from 4.022% late on Tuesday.

The 30-year bond US30YT=RR yield rose 1.6 basis points to 4.6397% from 4.624% late on Tuesday.

The 2-year note US2YT=RR yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 2.7 basis points to 3.506%, from 3.479% late on Tuesday.

Oil prices reversed earlier gains, drifting near a five-month low after the International Energy Agency projected a 2025 supply surplus, and amid the escalating trade dispute between the world's two largest economies.

U.S. crude CLc1 dipped 0.73% to settle at $58.27 per barrel, while Brent LCOc1 settled at $61.91 per barrel, down 0.77% on the day.

Gold extended its record run, breached the $4,200 per oz level for the first time as the safe haven metal continued to benefit from geopolitical tensions.

Spot gold XAU= rose 1.38% to $4,198.63 an ounce. U.S. gold futures GCc1 rose 1.06% to $4,182.50 an ounce.

(Reporting by Stephen Culp; Additional by Tom Wilson in London and Rae Wee in SingaporeEditing by Rod Nickel and Nick Zieminski)

((stephen.culp@thomsonreuters.com))