* Global stocks mixed as oil prices stay around $100 a

barrel

* Investors focus on inflation risks

* Traders rapidly cut Fed rate cut wagers for year

* Dollar gains ground

(Updates to afternoon U.S. trading)

By Lawrence Delevingne and Lucy Raitano

BOSTON/LONDON, March 13 (Reuters) - Global stocks fell

and oil prices stayed high on Friday as uncertainty over the

Iran war continued to disrupt energy supplies, heightening

concerns over fuel inflation and interest rates.

The price of oil hovered around $100 per barrel even as an

Indian tanker sailed out of the Strait of Hormuz and the U.S.

put forth measures to try and ease supply concerns.

Oil prices remain more than a third higher than when the

U.S. and Israel launched strikes on Iran almost two weeks ago.

On Wall Street, the S&P 500 fell 0.25% and the Nasdaq

Composite dropped about 0.6%.

The Dow Jones Industrial Average was little changed,

but was hit the hardest this week, putting it on track for its

biggest monthly losses since December 2024.

European shares extended their declines on Friday, with

Europe's STOXX 600 down 0.5%. MSCI's gauge of stocks

across the globe fell 0.7%.

The dollar has become the safe haven of choice during the

tumult, putting most other currencies under pressure. The U.S.

currency was set for a second consecutive week of gains, up 0.6%

on the day against a basket of other currencies.

OIL PRICE DRIVING MARKET

President Donald Trump said the U.S. was going to be hitting

Iran "very hard over the next week", shortly after issuing a

partial 30-day waiver for purchases of sanctioned Russian oil,

hoping to ease prices fuelled by the U.S.-Israeli war on Iran.

Brent crude oil futures rose to $101.47 a barrel,

while West Texas Intermediate crude was at $96.77 a

barrel. Both had hovered around $60 at the start of 2026.

Traders are trying to predict how long the disruption to oil

supplies will last.

"Headlines are coming at the market like water from a fire

hose, which is impacting the price of oil, and consequently,

financial markets," said Mitch Reznick, group head of fixed

income at Federated Hermes.

With Iran stepping up attacks across the Middle East as its

new Supreme Leader Mojtaba Khamenei vowed to keep the Strait of

Hormuz shipping lane closed, investors are bracing for a

prolonged conflict and higher oil prices.

The spectre of rising inflation has led markets to rapidly

reprice what they expect from central banks this year, with

traders now anticipating just 20 basis points of easing from the

Federal Reserve compared to 50 bps of cuts priced in last

month.

Two-year Treasury yields, which typically move in step with

Fed interest rate expectations, hit a six-month high on

Thursday.

Elsewhere, the Personal Consumption Expenditures index, the

Federal Reserve's preferred inflation gauge, rose 0.3% in

January on a monthly basis, in line with economists' estimates.

At the same time, U.S. economic growth slowed more sharply

than initially thought in the fourth quarter amid downward

revisions to consumer spending and business investment,

government data showed on Friday.

"With markets laser-focused on oil prices and geopolitics,

today's numbers may mostly fly under the radar," Ellen Zentner,

chief economic strategist for Morgan Stanley Wealth Management,

said in an email.

"Despite signs of economic softening, more sticky inflation

data simply strengthens the idea that the Fed will remain on the

sidelines."

SHIFTING RATES OUTLOOK

Interest rate futures that had been priced for two

quarter-point cuts by the end of the year before the conflict

began are now barely pricing in one.

For U.S. government bond trading on Friday, the two-year

note yield fell 3.5 bps to 3.727% after hitting its

highest level since August 22 on Thursday. U.S. 10-year notes

ticked up to 4.281%

Investor focus will switch to a slate of policy meetings

next week, with the Fed, the Bank of Japan, the European Central

Bank and the Bank of England all due to meet, with most expected

to keep rates unchanged.

The Reserve Bank of Australia is broadly expected to hike

rates next week.

In currencies, the euro fell 0.6% to $1.144, on

course for a weekly decline of more than 1%.

The yen hit its weakest since July 2024 at 159.69 per

U.S. dollar on Friday as Japan warned it was ready to take

action to protect against yen declines. It was last at 159.59.

Analysts said the bar for intervention is higher this time

around, as any action now could prove futile in the face of

relentless dollar buying.

Gold was 0.6% lower at $5,047 per ounce on Friday,

and was set for a drop on the week.