(Updates prices throughout, adds U.S. sanctions details in

paragraph 3)

* S&P 500, Nasdaq fall and EU stocks gain

* Oil prices fall as Iran and US say progress made in talks

* Sterling and UK bonds rise after PM Starmer resigns

By Chibuike Oguh

NEW YORK, June 22 (Reuters) - Global stocks were mostly flat

on Monday while oil prices fell, as optimism over progress in

U.S.-Iran talks was offset by expectations of higher interest

rates that pushed U.S. Treasury yields up.

U.S. Vice President JD Vance said in Switzerland that Iran

agreed to allow nuclear inspectors into the country, with

conversations over the inspections possibly beginning as soon as

this week.

The U.S. Treasury Department authorized Iranian sales of crude

oil and petrochemical and petroleum products through August 21,

easing decades-old sanctions as it pushes toward a final peace

deal with Iran in return for commitments on nuclear inspections

and free transit through the Strait of Hormuz.

On Wall Street, the benchmark S&P 500 and the Nasdaq were

lower on the day, dragged down by communication services and

consumer discretionary stocks. The Dow was higher.

The Dow Jones Industrial Average rose 0.13%, the S&P

500 fell 0.46% and the Nasdaq Composite fell

1.32%.

Europe's STOXX 600 index was last up 0.58%. MSCI's

gauge of stocks across the globe fell 0.08%.

Asian stocks climbed overnight, supported by the apparent

progress in peace talks. MSCI's broadest index of Asia-Pacific

shares outside Japan closed higher by 0.82%.

Markets are being driven by the Fed's hawkish outlook and

reduced expectations that new Fed Chair Kevin Warsh would move

to begin cutting rates, said Gerry Sparrow, chief investment

officer at Sparrow Capital Management.

"The market was somewhat surprised by the new Fed chair's

action as it was under the expectation that he was going to be a

little easier on rates," Sparrow said.

The Federal Reserve last Wednesday held interest rates steady,

but policymakers expect a hike in borrowing costs later this

year amid growing concerns about inflation lodged above the U.S.

central bank's 2% target.

The yield on benchmark U.S. 10-year notes rose

5.78 basis points to 4.509%.

The apparent progress in discussions pushed Brent

crude futures to settle lower by 3.38% to $77.90 a barrel, far

below its May peak of $126.41.

"The progress in peace talks is good but the only negative

surprise was the new Fed wasn't a little bit more

accommodative during its most recent announcement," Sparrow

said.

UK POUND RISES AFTER STARMER RESIGNS

The pound rose after Prime Minister Keir Starmer announced his

resignation, paving the way for Britain's seventh leader in 10

years.

The pound reversed earlier losses and was up 0.06% at

$1.3243.

Former Manchester Mayor Andy Burnham is the favorite to succeed

Starmer, but investors said a key question for nervous UK bond

markets would be who becomes finance minister.

The euro eased 0.38% to $1.1424, after hitting a

three-month low on Friday at $1.1418.

The dollar was up 0.14% at 161.51 yen, with only the

threat of Japanese intervention preventing the currency rising

to 2024's 40-year high of 161.96.

The dollar index, which measures the greenback

against a basket of currencies including the yen and the euro,

rose 0.18%. Spot gold rose 0.76% to $4,192.46 an ounce.