(Updated prices at 4 p.m ET/ 2100 GMT)

By Sinéad Carew and Lisa Pauline Mattackal

Nov 12 (Reuters) - Major Wall Street indexes closed

lower on Tuesday as investors booked some profits from a

post-election rally and turned cautious ahead of U.S. economic

data due this week.

The three major indexes had rallied to record highs since

the Nov. 5 U.S. election as investors bet on a boost to equities

from President-elect Donald Trump's proposed tax cuts and the

prospect of easier regulatory policies.

But investor enthusiasm was dampened on Tuesday. European

shares lost 2% as European Central Bank policymakers warned that

increased tariffs from Trump would hamper global growth.

Some of the stocks expected to perform well under Trump gave

back gains with shares in electric car maker Tesla

falling during Tuesday's session after rising nearly 40% since

election day.

The small-cap Russell 2000 index lost ground after

closing at a three-year high on Monday. And rising U.S. Treasury

yields hurt equities as bond investors priced in Trump policies.

"The 10-year Treasury yield is kind of creating a

headwind against the equity rally. There's sort of these

conflicting signals where investors are celebrating all of these

growth initiatives but the bond market is pushing back," said

Jack Ablin, chief investment officer at Cresset Capital.

"The problem is between tariffs, tax cuts and

immigration restrictions, it really is pushing on creating

inflation pressure that the bond market can't ignore."

Russell Price, chief economist at Ameriprise Financial,

said the decline in stocks overseas added some pressure to U.S.

stocks, along with profit-taking ahead of inflation data.

"When we opened up already experiencing some downside with

the very strong run that we've had, investors tend to look to

take some profits just in case stocks continue to slide," Price

said.

On investors' radar is Wednesday's consumer price inflation

data, followed by producer prices inflation and retail sales

data later this week, as these could provide clues about the

U.S. Federal Reserve's policy path going forward.

The data presents a near-term risk to investments, said

Price. "It very likely is contributing to a little bit of the

downside that we're seeing today."

According to preliminary data, the S&P 500 lost 17.17

points, or 0.29%, to end at 5,984.18 points, while the Nasdaq

Composite lost 16.00 points, or 0.08%, to 19,282.76. The

Dow Jones Industrial Average fell 377.45 points, or

0.85%, to 43,915.68.

Markets have already dialed back expectations for

interest-rate reductions over the next year, given strong

economic data and the possible inflationary impact of some Trump

policies.

Minneapolis Federal Reserve Bank President Neel Kashkari

said Tuesday afternoon that U.S. monetary policy is "modestly

restrictive," with short-term borrowing costs continuing to slow

inflation and the economy, but not by a lot.

Richmond Fed President Thomas Barkin said earlier in the day

that the U.S. central bank is ready to respond if inflation

pressures rise or the job market weakens.

Biotech firm Novavax ( NVAX ) dropped after cutting its

annual revenue forecast due to lower-than-expected sales of its

COVID-19 vaccine.

Honeywell ( HON ) hit a record high after activist investor

Elliott Investment said it has built a stake worth more than $5

billion in the industrial conglomerate.