(Update prices and commentary)

By Naomi Rovnick and Ankur Banerjee

LONDON/SINGAPORE, May 24 (Reuters) - Global stocks

slipped on Friday, heading for a weekly loss, after data

signalling a rebound in U.S. inflation outweighed a boost to

sentiment in the wake of strong earnings from artificial

intelligence giant Nvidia.

MSCI's global share index, which hit

intraday highs earlier in the week, slipped 0.2% and was set for

a 0.9% weekly loss. Europe's Stoxx 600 share index was

0.5% lower.

Nvidia, the $2.6 trillion chipmaker, has contributed

about a third of total U.S. stock market returns this year

meaning the run-up to its quarterly earnings on Wednesday kept

traders on edge for days.

The AI giant's shares have gained 12% this week, but failed

to lift broader sentiment after surveys showed U.S. business

activity was improving but companies were also reporting higher

prices across a sweep of input categories, from timber to wages.

Wall Street's S&P 500 share index is 0.7% lower

this week, although stock futures suggested it would tick

higher on Friday.

Minutes from the Federal Reserve's last meeting released on

Wednesday showed some policymakers might consider hiking

benchmark interest rates beyond their current 23-year high of

5.25%-5.5% if inflation does not fall steadily towards an

average 2% target.

Traders expect just 35 basis points (bps) of Fed rate cuts

in 2024, versus 150 bps at the start of the year..

Premier Miton Investors chief investment officer Neil

Birrell said stock markets may not rally much further if higher

rate forecasts keep lifting the income yields on government

bonds and make stocks less attractive in comparison.

"Earnings are strong but the bar for the sort of upside

surprise needed to push markets higher is rising," he said.

"A rise in (U.S.) Treasury yields back towards 5% is the

sort of thing people get worried about."

Stocks were shaken in October when the yield on the

benchmark 10-year Treasury hit 5%. This key debt

yield, which climbs as the price of the security falls in

response to expectations of higher rates, touched 4.498% on

Thursday and was last at 4.475%.

Ross Yarrow, managing director of U.S. equities at

investment bank Baird, said it was not the time to sell out of

the tech stocks that dominate U.S. and world equity markets.

"There are significant risks in not owning stocks that have

become very large contributors to the market," he said.

"But inflation, and specifically inflation driven by oil, is

also a big risk."

ECB CUT IN JUNE

The European Central Bank (ECB) has all but committed to a

rate cut in June but its policymakers have warned further easing

may not be warranted because they expect inflation, which has

moderated substantially, to hover above their 2% target until

2025.

The yield on Germany's 10-year bund, last at

2.57%, has risen by the most in a week since mid-April.

The dollar index, which measures the U.S. currency

against a basket of six major peers, was up 0.4% on the week to

105.06, its largest one-week rise since mid-April.. The

dollar has gained 0.4% against the euro and about 0.9% versus

Japan's flailing yen.

Sterling was muted on Friday at $1.269, having

touched a two-month high of $1.2761 on Wednesday after data

showed UK inflation did not slow as much as expected in April.

British Prime Minister Rishi Sunak announced on Wednesday a

general election for July 4, with polls showing a big lead for

his Labour Party rival Keir Starmer, who may become the nation's

sixth leader in eight years following intense political turmoil.

British government bonds have underperformed major peers

this week, with the 10-year gilt yield 12 bps higher

at 4.25% and the interest rate sensitive two-year yield

up 16 bps to 4.5%.

Elsewhere, Brent crude oil was 0.5% lower at $80.98.

Gold rose 0.5% to $2340 per ounce.

(Editing by Lincoln Feast, Michael Perry, Alex Richardson and

Susan Fenton)