* Oil prices fell more than 1%, nearing four-month lows as

Gulf tankers looked set to resume Hormuz transit

* The dollar hit its highest in a year against major

currencies as investors sought safer havens

* South Korea's Kospi rebounded 3.5% on Wednesday after a

10% drop on Tuesday

(Updates prices)

By Amanda Cooper

LONDON, June 24 (Reuters) - Stocks staged a tentative

recovery on Wednesday from a rout in technology shares on the

back of caution about overstretched AI valuations, while crude

oil prices fell towards four-month lows and the dollar marched

up to one-year highs.

Technology stocks, which were hit hard on Tuesday, edged up

ahead of earnings from chipmaker Micron, whose products help

power the AI boom. But sentiment was fragile and investors opted

for safer havens such as the dollar.

"Price action in markets over the last seven trading days

has been alarming, not just when it falls, but also when it

rises," said Michael McCarthy, market analyst at Moomoo

Securities Australia. "When markets move so rapidly, in either

direction, it's a sign of instability."

Wild swings in Asian equities overnight that saw South

Korea's Kospi turn Tuesday's 10% drop into a 3.5% gain

on Wednesday did not translate into high volatility in Europe.

DOLLAR 'FEAR PREMIUM' CITED

The broader regional stock market was 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.

U.S. stock futures were up 0.2% to 0.4%. The

dollar, meanwhile, rose for a third straight day against a

basket of major currencies to its highest in a year.

Strategists at Scotiabank say they believe the dollar should

retreat, as expectations for at least one rate hike from the

Federal Reserve this year, which have lifted the currency, are

overdone, especially with oil prices easing.

"The dollar also continues to benefit from a sizeable 'fear

premium' owing to lingering concerns related to geopolitics and

specifically the U.S./Iran conflict," they said.

STRAIT OF HORMUZ

Oil prices fell more than 2% on Wednesday, 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 that

the U.S. and Iran have provided conflicting accounts on what the

two countries had agreed on as part of their peace deal,

including key elements such as nuclear inspections and control

of the strait.

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

down 1 basis point at 4.48%.

The euro was one of the main victims of dollar strength on

Wednesday, 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 $1.1345. It has lost over 2.5% in June

so far, heading for its worst monthly performance since last

July.

The yen was also weaker on the day, trading around

161.695, keeping markets on edge over a potential currency

intervention to prop up the battered Japanese currency.

Minutes from the Bank of Japan's most recent meeting, at

which it raised interest rates to a 31-year high of 1.00%,

showed policymakers debated mounting inflation risks, with some

calling for faster interest rate increases to raise borrowing

costs nearer levels deemed neutral to the economy.

With the dollar on the rise, gold extended losses,

falling 1.5% to $4,045 an ounce, nearing two-week lows.

(Additional reporting by Satoshi Sugiyama in Tokyo

Editing by Lincoln Feast)