*

S&P 500, Nasdaq edge higher

*

Oil prices drop 2%

*

Gold trades above $2,500

*

European stocks gain

*

U.S. dollar weakens

(Updates prices throughout, adds analyst comment)

By Chibuike Oguh and Iain Withers

NEW YORK/LONDON, Aug 27 (Reuters) - A gauge of global

shares was flat in choppy trading while oil prices slipped on

Tuesday as investors weighed geopolitical risks as well as

impending Nvidia ( NVDA ) earnings and U.S. inflation data.

Markets are anticipating an imminent start to the Federal

Reserve's monetary policy easing, after Chair Jerome Powell said

on Friday the central bank was ready to start cutting rates.

The benchmark S&P 500 and Nasdaq edged higher in choppy

trading while the Dow traded lower. The Dow Jones Industrial

Average fell 0.12% to 41,189.90, the S&P 500

gained 0.09% to 5,621.87 and the Nasdaq Composite gained

0.09% to 17,741.59.

European stocks finished up 0.16%, following a late

rally in Japan's Nikkei index, which ended 0.47% higher. MSCI's

all-country index of stocks was up 0.02% at

830.22.

Gold traded above $2,500 per ounce on rate cut

expectations and lingering concerns about the Middle East

conflict, exacerbated by a major missile exchange between Israel

and Hezbollah on Sunday.

Middle East tensions - along with concerns about a potential

shutdown of Libyan oil fields - had led to a surge in oil prices

of more than 7% over the previous three sessions. However, that

rally lost steam on Tuesday, with a slight dip in prices.

Investors were also on edge ahead of Nvidia's ( NVDA )

earnings report on Wednesday, where anything short of a stellar

forecast from the chipmaker could jolt investor confidence in

the AI-fuelled rally.

"I think the big story today is what's going to happen with

Nvidia ( NVDA ) tomorrow, and this seems to be like what everybody is

poised to react and nobody wants to really commit one way or the

other," said James St. Aubin, chief investment officer at Ocean

Park Asset Management in Santa Monica, California.

"Nvidia ( NVDA ) is almost 5% of the S&P 500 earnings

contribution and almost 7% of the market cap weight so it's

significant in terms of its influence of the overall market."

U.S. consumer confidence rose to a six-month high in

August although Americans are becoming more anxious about the

labor market,

data showed

on Tuesday.

The dollar index, which measures the greenback

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

fell 0.13% at 100.72, with the euro up 0.05% at $1.1167.

A key measure of U.S. inflation due on Friday could further

influence market perceptions of how quickly the Fed will act.

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

2.8 basis points to 3.846%. Investors are betting on either a

25-basis point or a 50-basis point interest-rate cut in

September, with odds of a 25-bps cut at about 71%, while odds of

a 50-bps cut are at about 29%, according to CME Group's Fed

Watch tool.

"I think 25 bps is locked and loaded in terms of the market

expectations at this point, but the question is, is 50 bps on

the table?" St. Aubin added.

Also keeping sentiment in check was a move by Canada,

following the lead of the United States and European Union, to

impose a 100% tariff on imports of Chinese electric vehicles and

a 25% tariff on imported steel and aluminium from China.

Oil prices dipped, with Brent crude futures 2.03%

lower at $79.78 a barrel, while U.S. crude futures lost

2.16% to $75.75 a barrel.