GLOBAL MARKETS-Stocks up and dollar steady ahead of US-China meeting, Iran talks hit stalemate

* US-Iran talks stumble

* Oil rallies, stocks rise modestly

* Iran on the agenda with Trump ​to visit ⁠China this week

NEW YORK/LONDON, May 11 (Reuters) - Stocks inched higher while the dollar was little changed on Monday as investors awaited a meeting between U.S. President Donald Trump ​and Chinese ‌President Xi Jinping, while oil prices rose as negotiations between the U.S. and Iran appeared to stall.

Trump on Sunday rejected Iran's response to a U.S. ⁠proposal for peace talks to end the war in the Middle East, saying Tehran's demands ⁠were "totally unacceptable." Iranian media reported that the plan stressed ​the need for an end to the war on all fronts and lifting of sanctions on Tehran, along with reparations and recognition of Iran's control of the Strait of Hormuz, a vital energy conduit.

The Middle East is expected to be a key part of the agenda later this week ​in Trump ‌and Xi's first face-to-face talks in more than six months, said Scott Wren, senior global market strategist at Wells Fargo Investment Institute, adding that investors were cautiously waiting for the meeting. "It's all about the strait and when it's going to open," said Wren. "There's some optimism that China will have some influence in resolving the strait issue." On Wall Street at 10:58 a.m. ET (1458 GMT), the Dow Jones Industrial Average rose 22.37 points, ​or 0.05%, to 49,632.29, the S&P 500 rose 19.63 points, or 0.27%, to 7,418.56 and the Nasdaq Composite rose 45.81 points, or 0.18%, to 26,293.54.

MSCI's ‌gauge of stocks across the globe rose 3.23 points, or 0.29%, to 1,108.86.

The pan-European STOXX 600 index fell 0.05%.

In currencies, the dollar retreated from earlier highs after Trump's rebuff of Iran's response ‌kept concerns about an extended war intact.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.11% to 97.90, with the euro down 0.04% at $1.178.

Against the Japanese yen, the dollar strengthened 0.22% to 156.99.

Sterling strengthened 0.03% to $1.3636 as British Prime ​Minister Keir Starmer attempted to quell a rebellion within his ruling Labour party following a mauling in last week's local elections. In energy markets, oil prices rose on supply ‌fears as the Strait of Hormuz stayed largely closed.

U.S. crude rose 2.35% to $97.66 a barrel and Brent rose to $103.80 per barrel, up 2.47% on the day.

U.S. Treasury yields edged higher on concerns about high inflation as oil prices rose.

The yield on benchmark U.S. 10-year notes rose 3 basis ⁠points to 4.394%, ⁠from 4.364% late on Friday while the 30-year bond yield rose 2.3 basis points to ‌4.9699%.

The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 3.1 basis points to 3.924%.

Gold prices reversed course to rise in ​volatile trading on Monday, as investors assessed ​developments in U.S.-Iran diplomacy and awaited key U.S. inflation data due later this week.

Spot gold rose ‌0.21% to $4,724.34 an ounce. U.S. gold futures rose 0.15% to $4,727.70 an ounce.

Earlier, optimism over AI helped drive Chinese stocks up 1.6% while South Korea's chipmaker-heavy KOSPI index rose 4.3%. Data showed China's producer prices jumped to a near-four-year high, while consumer inflation also accelerated on elevated global energy costs. (Reporting by Sinéad Carew, Amanda Cooper, Editing by Stephen Coates, Gareth Jones, Mark Potter and Nia Williams)