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US stocks end down

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MSCI all country stock index hits record high early

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Dollar index dips

(Updates to 5:45 p.m. ET)

By Caroline Valetkevitch

NEW YORK, June 28 (Reuters) - Global stock indexes edged

lower on Friday, reversing early gains, while Treasury yields

rose and the U.S. dollar declined as investors absorbed data

that showed U.S. monthly inflation was unchanged in May.

The flat reading in the U.S. personal consumption

expenditures (PCE) price index last month followed an unrevised

0.3% gain in April, the data showed.

In the 12 months through May, the PCE price index increased

2.6% after advancing 2.7% in April. Last month's inflation

readings were in line with economists' expectations.

The data fueled optimism for some investors that the Federal

Reserve could begin cutting interest rates in September.

The MSCI world stock index, S&P 500 and Nasdaq all hit

record highs in early trading but then retreated.

On Wall Street, volume surged toward the closing bell when

the FTSE Russell finalized the reconstitution of its indexes. It

was the second-biggest daily volume of the year.

"In the morning, the market seemed to be most focused on the

PCE report," said Quincy Krosby, chief global strategist at LPL

Financial in Charlotte, North Carolina.

But, "you had the Russell reconstitution, and the

expectations were that we could see - especially toward the

afternoon and close - quite a bit of movement and churn in the

market," she said. "You also had end-of-the-quarter

repositioning and selling."

The Dow Jones Industrial Average fell 45.20 points,

or 0.12%, to 39,118.86, the S&P 500 lost 22.39 points, or

0.41%, to 5,460.48 and the Nasdaq Composite lost 126.08

points, or 0.71%, to 17,732.60.

For the quarter, with the S&P 500 gained 3.9%, the Nasdaq

rose 8.3% and the Dow fell 1.7%.

MSCI's gauge of stocks across the globe fell

1.74 points, or 0.22%, to 802.01. The STOXX 600 index

fell 0.23%.

Investors were still digesting comments made during the U.S.

presidential debate late Thursday between Democratic President

Joe Biden and Republican rival Donald Trump ahead of the

November election. The debate left some of America's allies

bracing for a Trump return to office as president.

Trump Media & Technology Group ( DJT ) shares rose early in

the day but ended down 10.8%.

U.S. Treasury yields were higher amid political uncertainty

following the U.S. presidential debate and ahead of the French

legislative elections.

Yields, which move inversely to prices, had declined after

the U.S. inflation reading.

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

10.4 basis points to 4.392%, from 4.288% late on Thursday.

The first round of voting in France is on Sunday, but the

final outcome will not be known until after a second round of

voting on July 7.

The U.S. dollar eased marginally after the inflation data.

The dollar initially fell against the yen, the currency pair

most sensitive to U.S. economic data because of a high, positive

correlation to Treasury yields.

The greenback, however, edged higher to trade near flat on

the day, with investors still focused on the wide interest rate

differential between the United States and Japan.

The dollar was last up slightly against the Japanese yen at

160.815 yen, after earlier hitting a 38-year high of

161.27 yen.

The yen's slide has fueled expectations of intervention by

the Japanese authorities to stem the currency's weakness.

The dollar index, which measures the greenback

against a basket of currencies, fell 0.05% at 105.84, with the

euro up 0.1% at $1.0713.

Oil prices fell. U.S. West Texas Intermediate (WTI) crude

futures fell 20 cents, or 0.24%, to settle at $81.54 a

barrel.