(Updates prices to U.S. morning trading, adds subheading)

* MSCI's global index dips; Wall Street off after Japan's

Nikkei, South Korea tumble

* Chips drop globally even as TSMC earnings blow past

expectations

* Bond yields rise slightly with US dollar

By Sinéad Carew and Marc Jones

NEW YORK/LONDON, July 16 (Reuters) - Tech-heavy equity

indexes around the world fell on Thursday as investors offloaded

chip stocks, while oil futures gave up earlier gains even as the

U.S. and Iran stepped up attacks.

Chip stocks fell from Asia to the U.S., as higher-than-expected

77% earnings growth from Taiwanese chip manufacturing giant TSMC

was not enough to impress investors who have heavily

leaned into technology stocks related to artificial

intelligence.

"That tells you the AI trade isn't being priced on growth

anymore. It's being priced on perfection. Any earnings report

that's merely great, instead of flawless, gets sold," said Gene

Goldman, chief investment officer at Cetera in El Segundo,

California.

U.S. retail sales increased marginally in June as lower gasoline

prices weighed on receipts at service stations, though consumers

continued to support underlying spending. The sales increase of

0.2% was in line with the mean economist expectation.

And after two days of U.S. equity gains on soft inflation

data, Goldman said Thursday's trade represents "the market

catching its breath, not changing its mind."

On Wall Street at 12:13 p.m. ET (1613 GMT), the Dow Jones

Industrial Average rose 9.02 points to 52,802.29, the S&P

500 fell 27.64 points, or 0.36%, to 7,544.76 and the

Nasdaq Composite fell 250.25 points, or 0.95%, to

26,018.97.

The Philadelphia semiconductor index sank more than

4%, putting it on track for a second straight day of losses.

MSCI's gauge of stocks across the globe rose

3.23 points, or 0.3%, to 1,124.91 and the pan-European STOXX 600

index edged down 0.01%.

Earlier, South Korea's volatile KOSPI index fell more

than 6%, while Japan's Nikkei closed nearly 3% lower.

IRAN, US TRADE MORE ATTACKS

Iran and the United States exchanged fire on Thursday,

intensifying attacks that have persisted since the weekend and

all but torn up the truce that paused fighting last month. While

the two countries wrestle for control of the Strait of Hormuz,

Iran signalled that it could prod Houthi allies in Yemen to

close the Bab al-Mandeb Strait at the mouth of the Red Sea,

another key oil route.

Oil prices gave up earlier gains, with U.S. crude

falling 0.3% to $79.37 a barrel and Brent trading at

$84.91 per barrel, down 0.1% on the day.

U.S. Treasury yields rose after economic figures on consumer

health and the labor market did little to alter investor

expectations for the path of interest rates from the Federal

Reserve.

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

2.84 basis points to 4.573% from 4.545% late on Wednesday, while

the 30-year bond yield rose 2.11 basis points to

5.1041%.

The 2-year note yield, which typically moves in

step with Fed interest rate expectations, rose 3.6 basis points

to 4.164%.

The dollar edged higher against major peers though was still

near a one-month low, reflecting expectations that the U.S.

economy will remain resilient and that the Fed will hold rates

steady this month.

The dollar index, which measures the greenback

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

rose 0.24% to 100.70, with the euro down 0.17% at

$1.1444.

Against the Japanese yen, the dollar strengthened

0.15% to 162.42.

Sterling weakened 0.4% to $1.348, slipping from the

two-month high it reached on Wednesday following reports that

soon-to-be British Prime Minister Andy Burnham will likely name

fiscal conservative Shabana Mahmood as his new chancellor of the

exchequer.

Precious metals fell. Spot gold dropped 1.1% to $4,014.81

an ounce and spot silver fell 2.3% to $56.43 an ounce.