(Updated prices at 02:45 p.m ET/ 1845 GMT)

By Sinéad Carew and Yoruk Bahceli

Oct 1 (Reuters) - MSCI's global equities index sank with

Treasury yields as investors shunned riskier assets while oil

futures rallied sharply on concerns about supply after Iran

launched missiles at Israel on Tuesday.

Iran fired a salvo of ballistic missiles at Israel in

retaliation for Israel's campaign against Tehran's Hezbollah

allies in Lebanon. After the attacks, President Joe Biden

directed the U.S. military to aid Israel's defense and shoot

down missiles aimed at Israel, the White House National Security

Council said.

The U.S. dollar index rose and gold, traditionally a safe

haven, rose more than 1% as investors looked for less risky

places to put their money. Oil prices rallied as the escalating

violence raised concerns about supply.

On top of geopolitical worries, U.S. investors worried about

the aftermath of Hurricane Helene and the halt of about half of

U.S. ocean shipping due to a strike by dock workers on the East

and Gulf Coast after a midnight deadline passed with no sign of

a new contract deal with port owners.

Adding extra pressure to equities, Wall Street had ended

September on Monday with record closing highs for the S&P 500

and the Dow.

"Markets were priced for perfection. Then overnight we got a

few extra wrinkles in the mix. The port strike is one. The hit

east coast infrastructure took from the aftermath of hurricane

Helene is another," said Carol Schleif, Chief Investment Officer

at BMO family office in Minneapolis.

"Then you throw in the third factor of Iran firing missiles

at Israel," said Schleif, noting that the attacks added to gains

in the dollar and created demand for Treasuries. "Investors have

been holding their breath hoping it wouldn't escalate."

Oil prices settled sharply higher though below session

highs. Clay Seigle, an independent political risk strategist,

said in an email said that an Israeli attack on Iranian oil

production or export facilities could cause a material

disruption, potentially more than a million barrels per day.

U.S. crude settle up 2.44% at $69.83 per barrel and

Brent settled at $73.56 per barrel, up 2.59% on the day.

On Wall Street at 02:45 p.m. the Dow Jones Industrial

Average fell 16.95 points, or 0.04%, to 42,313.05, the

S&P 500 fell 36.03 points, or 0.63%, to 5,726.45 and the

Nasdaq Composite fell 216.30 points, or 1.19%, to

17,973.27.

MSCI's gauge of stocks across the globe fell

4.48 points, or 0.53%, to 847.30. Earlier, Europe's STOXX 600

index ended the day down 0.38%.

In foreign exchange markets, the Japanese yen and Swiss

franc, seen as safe haven currencies, had both gained ground

earlier reports pre-empted the attacks from Iran. The dollar was

also helped by a push back from Federal Reserve Chair Jerome

Powell on Monday against bets on bigger interest rate cuts.

The dollar index, which measures the greenback

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

rose 0.49% to 101.24.

The euro was down 0.59% at $1.1068 while against the

Japanese yen, the dollar strengthened 0.1% to 143.77.

Against the Swiss franc, the dollar strengthened 0.24% to

0.848.

As investors looked to the safety of U.S. Treasuries, the

yield on benchmark U.S. 10-year notes fell 5.5 basis

points to 3.747%, from 3.802% late on Monday while the 30-year

bond yield fell 5.1 basis points to 4.0823%.

The 2-year note yield, which typically moves in

step with interest rate expectations, fell 2.8 basis points to

3.6228%, from 3.651% late on Monday.

Precious metals, also seen as a safe haven asset in

uncertain times, were in demand on Tuesday. Spot gold

rose 1.09% to $2,663.20 an ounce. U.S. gold futures rose

0.95% to $2,661.10 an ounce.