(Updates prices to U.S. trading session)

* Wall Street trading is choppy, dollar up ahead of Fed

meeting

* Microsoft ( MSFT ), Alphabet, Amazon ( AMZN ) and Meta earnings due

* Trump unhappy with latest proposal from Tehran

* Oil prices rise after report US will extend blockade

By Sinéad Carew and Elizabeth Howcroft

NEW YORK/ PARIS, April 29 (Reuters) - MSCI's global

equities gauge fell on Wednesday as oil prices rallied on

worries about prolonged disruption in the Middle East while

investors were also cautious ahead of financial releases from

U.S. megacap technology firms and a Federal Reserve policy

update.

Oil prices climbed after a Wall Street Journal report cited

U.S. officials saying President Donald Trump instructed aides to

prepare for an extended blockade of Iran.

U.S. crude rose 5.22% to $105.15 a barrel and Brent

rose to $117.16 per barrel, up 5.3% on the day with

little sign of a resolution two months into the U.S.-Israeli war

on Iran, which has snarled energy supplies through the crucial

Strait of Hormuz. Trump said he was unhappy with Iran's latest

proposal. In a social media post, he urged Iran to sign a deal.

Meanwhile, investors were waiting for earnings reports from

market heavyweights Microsoft ( MSFT ), Alphabet,

Amazon ( AMZN ) and Meta, due later in the session.

On Wall Street, trading in the S&P 500 was choppy on Wednesday

while the benchmark's technology sector was attempting

a small gain after it pulled back sharply from a record high in

the previous session following a report that artificial

intelligence company OpenAI had missed internal targets.

"The S&P 500 is roughly at the level where it was before the

war. The easy part of buying back the dip from oversold

conditions is over. Now the market has to deal with the reality,

which is probably a very long stand-off with Iran," said Irene

Tunkel, chief strategist and founder of Belsize Park Investment

Research.

CROSS CURRENT

But despite geopolitical uncertainties, Tunkel noted that

investors have been encouraged by the first-quarter earnings

season.

"We have a cross-current," she said. "On the one hand, we

have a conflict. On the other hand, earnings that have been

rolling in so far have been quite good. Guidance has been quite

positive."

On Wall Street at 10:58 a.m. ET (1458 GMT) the Dow Jones

Industrial Average was down 247.45 points, or 0.50%, at

48,894.48, the S&P 500 was flat at 7,138.70 and the

Nasdaq Composite had gained 33.38 points, or 0.14%, to

24,699.18.

MSCI's gauge of stocks across the globe

fell 1.30 points, or 0.12%, to 1,067.68.

The pan-European STOXX 600 index fell 0.61%.

FEDERAL RESERVE

U.S. Treasury yields rose as escalating Iran tensions stoked

concerns about elevated energy costs ahead of the Fed's rate

decision later in the day.

Traders have been betting that policymakers will keep rates

unchanged but investors will watch for Fed commentary on the

economic impact of the Iran war after the central bank's April

meeting, which is expected to be the last with Jerome Powell at

the helm.

Kevin Warsh, Trump's pick to lead the Fed, cleared a key

procedural hurdle on Wednesday, opening the way for him to

succeed Powell in coming weeks amid the White House's

unprecedented efforts to exert control over the world's most

powerful central bank.

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

4.4 basis points to 4.398% from 4.354% late on Tuesday, while

the 30-year bond yield rose 3.5 basis points to

4.979% from 4.944% late on Tuesday.

The 2-year note yield, which typically moves in

step with interest rate expectations for the Federal Reserve,

rose 4.9 basis points to 3.893% from 3.844% late on Tuesday.

In currencies, the dollar index hit its highest level

against Japan's yen since March 30 and was up 0.3% at

160.09 yen.

The dollar index, which measures the greenback

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

rose 0.17% to 98.76, with the euro down 0.1% at $1.1699.

Sterling weakened 0.11% to $1.3501.

In precious metals, gold was on track for its third straight

day of declines after hitting its lowest level since March 31.

Spot gold fell 1.25% to $4,537.55 an ounce.