GLOBAL MARKETS-Global equities rise modestly with the dollar, bond yields as US inflation soars

* MSCI's global index inches up, S&P 500 near flat

* Oil prices mixed ​as Iran war ⁠disrupts supply, IEA warns of shortfall

* Investors wait on Trump-Xi meeting

NEW YORK/PARIS, May 13 (Reuters) - MSCI's global equities gauge advanced slightly with the dollar on Wednesday, while U.S. Treasury yields eyed a third day of gains as investors assessed hotter-than- expected inflation data while they waited for a summit between U.S. ​President ‌Donald Trump and China's Xi Jinping. The Labor Department's Bureau of Labor Statistics said U.S. producer prices increased more than expected in April for their biggest gain since early 2022. This was the latest indication of an economic fallout from ⁠the U.S.-Israeli war on Iran after Tuesday's U.S. inflation data showed consumer prices rose the most in three years, ⁠driven by an increase in energy-related costs.

"Given the concerns that already existed ​about the upside pressure on inflation this was one more data point to exacerbate those concerns," said Jim Baird, chief investment officer at Plante Moran Financial Advisors.

"You're seeing the reaction in stocks and in bonds in terms of an upside in yields. It's one of a couple of key narratives and it's probably the key worry for investors in the near term. You've got these conflicting forces, the concerns ​around inflation and what that ‌will mean for Fed policy and rates," he added.

"The upside for stocks has been a strong earnings season even though it's been more concentrated in tech and AI adjacent stocks."

President Trump and an entourage that included Nvidia's Jensen Huang and Elon Musk were greeted with a lavish welcome in Beijing on Wednesday as he prepared to ask China's Xi Jinping to "open up" to U.S. business at the start of their two-day summit.

While some investors have held out hope that the talks could lead to progress in the Middle East war, Trump said on Tuesday that he did not think ​he would need China's help to end the conflict.

"What we'll hear is a message that it was a productive meeting. The reality will probably be more limited in terms of tangible progress regarding the war ‌and trade relations. I would be very measured in my expectations. You have to be," said Plante Moran's Baird.

On Wall Street at 11:00 a.m. ET (1500 GMT), the Dow Jones Industrial Average fell 258.37 points, or 0.52%, to 49,502.19, the S&P 500 rose 10.15 points, or 0.14%, ‌to 7,411.11 and the Nasdaq Composite rose 163.96 points, or 0.62%, to 26,249.15.

MSCI's gauge of stocks across the globe rose 2.91 points, or 0.26%, to 1,106.23.

The pan-European STOXX 600 index rose 0.64%. In bond markets, longer-dated yields reached the highest levels since July on Wednesday after producer prices rose more than economists had expected in April, before easing as traders evaluated the likely impact on Fed policy.

The yield ​on benchmark U.S. 10-year notes rose 1.7 basis points to 4.489%, from 4.471% late on Tuesday while the 30-year bond yield rose 2.1 basis points to 5.0484%.

The 2-year note yield, which typically moves in step with interest rate expectations for the ‌Federal Reserve, rose 1.3 basis points to 4.009%. In currencies, the dollar gained on Wednesday, hitting a two-week high following the latest hot U.S. inflation reading, while investors focused on the talks set to begin in Beijing between Trump and China's Xi.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.19% to 98.51, with the euro down 0.25% at $1.1708.

Against the Japanese ⁠yen, the dollar ⁠strengthened 0.16% to 157.86, having briefly spiked Tuesday on "rate check" speculation, often seen as a precursor to intervention.

Sterling weakened 0.16% to $1.3515 as ‌Prime Minister Keir Starmer's grip on power weakened.

Oil prices were a mixed bag after rallying on Tuesday.

The International Energy Agency said global oil supply will fall short of demand this year, as the war wreaks havoc on Middle East oil production. ​The two sides have made no progress on an ​agreement to end hostilities while Israel has escalated its attacks in Gaza in the last five weeks.

However, some ships have been able ‌to pass through the Strait of Hormuz, and Reuters reported on Tuesday that both Iraq and Pakistan have cut deals with Iran to ship oil and liquefied natural gas from the Gulf, demonstrating Iran's ability to control energy flows through the strait.

U.S. crude rose 0.87% to $103.07 a barrel and Brent fell to $107.67 per barrel, down 0.08% on the day.

In precious metals, spot gold fell 0.72% to $4,679.79 an ounce. U.S. gold futures rose 0.04% to $4,679.60 an ounce. (Reporting by Sinéad Carew, Elizabeth Howcroft. Editing by Clarence Fernandez, Mark Potter and Keith Weir)