(Updates prices)

* U.S. equity indexes decline with Nasdaq leading losses

* Tech stocks tumble, defensive sectors find favor

* Dollar pares losses, U.S. Treasury yields slip

* Oil prices fall with Middle East outlook unclear

* EIA flags demand drop

By Sinéad Carew and Amanda Cooper

NEW YORK/LONDON, June 9 (Reuters) - MSCI's global equities

gauge managed a small gain on Tuesday with little support from

Wall Street where heavyweight technology stocks stumbled while

investors opted for safer bets, and oil prices settled lower as

updates from the Middle East brought little clarity on progress

toward peace.

On Monday, Iran and Israel had boosted hopes that tensions would

ease as they said they would stop attacking each other. But U.S.

President Donald Trump said on Tuesday that Iran had shot down a

U.S. Apache helicopter that was patrolling the Strait of Hormuz

overnight, and he vowed to respond, without providing details.

This was after Israel attacked the historic port city of Tyre in

southern Lebanon on Tuesday, killing at least eight people. Iran

had warned on Monday that it would resume hostilities if Israel

continued to attack its ally Hezbollah in Lebanon.

Meanwhile, the U.S. Energy Information Administration said oil

stockpiles in the world's largest economies were headed toward

their lowest levels since at least 2003. The EIA also said it

expects global oil demand to decline in 2026, reversing its

earlier forecast for an increase.

In equities, trading in Wall Street's main indexes was

choppy, with the S&P 500's heavyweight technology sector

falling as much as 5.5% before closing with a 1.8%

loss for the day. Sahak Manuelian, managing director for global

equities trading at Wedbush Securities, said investors were

selling technology stocks and rotating into more defensive

sectors such as real estate, utilities and

healthcare.

"Today we tried to rally early, and it was very, very

short-lived," said Manuelian, adding that investors were

shedding stocks that had gained a lot recently and preparing for

the highly anticipated market debut of Elon Musk's SpaceX this

week.

"Investors are looking at their portfolios and seeing how

much tech has moved and then also coming to grips with the

SpaceX IPO, which is scheduled for this Friday, and probably

have to bookmark some dollars for that. They're trying to take

some profits off some of these other things that have run so

much in such a short period of time and probably looking to see

where they can chase alpha in other sectors of the market,"

Manuelian said.

INFLATION AND RATE WORRIES

Investors were also bracing for the scheduled release of

consumer inflation data on Wednesday, according to Gene Goldman,

chief investment officer at Cetera, who sees inflation concerns

putting the Federal Reserve's interest rate policies in the

spotlight.

"There is a lingering bit of caution as investors are a bit

worried about tomorrow's potentially high inflation readings.

Higher-than-expected inflation further brings the Fed to the

forefront as a headline risk," Goldman said.

Since the release last Friday of a stronger-than-expected jobs

report for May, traders have increased bets that the Fed will

hike rates, with the probability for a 25-basis-point increase

by December close to 43% and bets on a 50-basis-point increase

rising to nearly 21%, from 12% last week, according to CME

Group's FedWatch tool.

On Wall Street, the Dow Jones Industrial

Average rose 84.93 points, or 0.17%, to 50,870.94, the

S&P 500 fell 19.29 points, or 0.26%, to 7,386.44 and the

Nasdaq Composite fell 250.84 points, or 0.97%, to

25,678.82.

MSCI's gauge of stocks across the globe rose

1.94 points, or 0.18%, to 1,102.90.

The pan-European STOXX 600 index finished down 0.5%

after rising earlier.

The CBOE volatility index, sometimes referred to as

Wall Street's fear gauge, finished up 0.95 points at 19.87 after

earlier hitting 23.34, which was its highest level since April

7.

In currencies, the dollar pared earlier losses as

uncertainty increased about the ceasefire with Trump's comment

about a response to the downed helicopter.

The dollar index, which measures the greenback

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

fell 0.1% to 99.94, with the euro up 0.09% at $1.1544.

Against the Japanese yen, the dollar strengthened

0.13% to 160.38.

In cryptocurrencies, bitcoin fell 2.08% to

$62,154.00.

U.S. Treasury yields dipped as traders waited for May's consumer

inflation report for signs of whether price pressures are

continuing to build.

The yield on benchmark U.S. 10-year notes fell 3

basis points to 4.52%, from 4.55% late on Monday while the

30-year bond yield fell 2.6 basis points to

4.9977%.

The 2-year note yield, which typically moves in

step with interest rate expectations for the Federal Reserve,

fell 3.6 basis points to 4.122%, from 4.158% late on Monday.

In energy markets, U.S. crude settled down 3.4%, or

$3.10, at $88.20 a barrel. Brent settled at $91.45 per

barrel, down $2.80 or 2.97% on the day.

In precious metals, gold prices fell on rising expectations for

a U.S. interest rate hike this year as investors waited for the

inflation data.

Spot gold fell 1.59% to $4,259.89 an ounce. Spot

silver fell 4.26% to $65.26 an ounce.