* Oil prices nearing four-month lows as Gulf tankers looked

set to resume Hormuz transit

* Dollar hit its highest in a year against major currencies

as investors sought safer havens

* Gold prices near seven-month low

(Recasts headline and first paragraph, updates prices and adds

analyst comment)

By Chibuike Oguh

NEW YORK, June 24 (Reuters) - Stocks fell on Wednesday,

erasing early Wall Street gains and leaving European shares

little changed, as valuation worries continued to weigh on

sentiment, while the dollar climbed to a one-year high.

Technology stocks, which were hit hard on Tuesday, reversed

early gains and continued their descent ahead of earnings from

chipmaker Micron, whose products help power the AI boom.

Sentiment has been fragile as investors priced in at least one

rate hike from the Federal Reserve this year.

On Wall Street, the benchmark S&P 500 and the Nasdaq were

lower while the Dow was up. Consumer discretionary, industrials

and materials stocks drove gains. Energy stocks were the biggest

losers as the continued flow of crude oil through the Strait of

Hormuz pushed prices toward four-month lows.

The Dow Jones Industrial Average rose 0.46%, the S&P

500 fell 0.28%, and the Nasdaq Composite fell

0.76%.

"Some of the rotation we are seeing some of it is how fast

we're in AI stocks," said Brandon Pizzurro, chief investment

officer at GuideStone. "It's a pause to reflect on how fast

we've come in recent weeks."

MSCI's gauge of stocks across the globe fell

0.31%.

MSCI's index of Asian equities outside Japan

rose 0.04%. South Korea's KOSPI gained 3.26% after

dropping 10% in the prior session.

In Europe, the broader regional stock market finished roughly

unchanged on the day. A 15% plunge in shares of defence

company Rheinmetall, after media reports of the German

government planning to scrap a delayed multibillion-euro frigate

project, was partly offset by gains in a scattering of

heavyweight luxury and tech stocks.

"We're probably approaching peak hawkishness in terms of

interpreting the Fed's new stance and it looks like that's

what's primarily driving asset prices," said Wasif Latif, chief

investment officer at Sarmaya Partners.

"Today, there's a bit of balance in equities that can be

related to the bounce off the pretty meaningful selloff

yesterday but also investors are trying to anticipate and

position the upcoming earnings announcement from Micron."

STRAIT OF HORMUZ

Crude oil prices fell, extending this week's losses and trading

near four-month lows, on signs that more tankers stranded in the

Gulf are set to move out of the Strait of Hormuz.

There is a lot of uncertainty about the outlook, given the U.S.

and Iran have provided conflicting accounts about what the two

countries have agreed as part of their peace deal, including key

elements such as nuclear inspections and control of the strait.

Brent fell to $73.74 per barrel to settle down 4.33%

on the day.

DOLLAR JUMPS

The U.S. dollar rose for a third straight day against a

basket of major currencies to its highest in a year as markets

anticipate Fed rate hikes.

The euro, however, was one of the main victims of dollar

strength, as investors lowered their expectations for the

European Central Bank to raise rates much more this year, while

pricing in a greater chance that the Fed will lift borrowing

costs.

The euro was trading around its lowest in a year,

down for a third day at $1.1352.

The yen was also weaker on the day, trading around

161.81, keeping markets on edge over a potential currency

intervention to prop up the battered Japanese currency.

The dollar index rose 0.24% to 101.63, hitting its

highest level since May 2025.

Gold prices fell to a more than seven-month low under

pressure from a firmer U.S. dollar.

Spot gold fell 3.2% to $3,976.73 an ounce.