* Wall Street indexes rally after Trump announcement of

Middle East agreement

* Oil, U.S. dollar and U.S. Treasury yields fall

* Gold rallies after touching more than 6-month low

(Updates prices to late U.S. afternoon trading)

By Sinéad Carew and Marc Jones

NEW YORK/LONDON, June 11 (Reuters) - MSCI's global equities

index spiked higher on Thursday while the dollar went into

reverse with oil futures on renewed hopes for peace in the

Middle East after U.S. President Donald Trump said he has

canceled planned strikes against Iran and that the U.S., Iran

and other Middle Eastern countries had come to an agreement.

Hours after threatening more bombings and a desire to "take" oil

export hub Kharg Island, Trump announced that talks "have been

brought to the highest level of Iranian leadership and

approved." He also wrote that "discussions and final points"

have been approved by the United States, Israel, Saudi Arabia,

UAE, Qatar, Turkey, Pakistan, Bahrain, Kuwait, Jordan, Egypt,

and others in a post on Truth Social.

In energy markets, oil prices quickly turned lower after the

announcement. U.S. crude fell 3% to $87.33 a barrel and

Brent fell to $90.13 per barrel, down 3.19% on the day.

On Wall Streetequities added to gains. At 01:59 p.m. ET (1759

GMT) the Dow Jones Industrial Average rose 803.60 points,

or 1.61%, to 50,722.98, the S&P 500 rose 93.44 points, or

1.27%, to 7,360.43 and the Nasdaq Composite rose 423.00

points, or 1.66%, to 25,592.50.

MSCI's gauge of stocks across the globe

rose 10.26 points, or 0.94%, to 1,097.24.

Earlier, the pan-European STOXX 600 index rose 0.54%

after the European Central Bank delivered its first interest

rate hike in nearly three years, as expected.

In currency markets, the safe-haven dollar lost ground on hopes

for Middle East peace. The dollar index, which measures

the greenback against a basket of currencies including the yen

and the euro,

fell 0.14% to 99.91, with the euro up 0.14% at $1.1551.

Against the Japanese yen, the dollar weakened 0.25% to

160.11. In cryptocurrencies, bitcoin gained 2.80% to

$63,480.09.

In fixed income markets, the yield on benchmark U.S. 10-year

notes fell 6.3 basis points to 4.477%, from 4.54%

late on Wednesday while the 30-year bond yield fell

6 basis points to 4.9655% from 5.025% late on Wednesday.

The 2-year note yield, which typically moves in step

with interest rate expectations for the Federal Reserve, fell 5

basis points to 4.077%, from 4.127% late on Wednesday.

In precious metals, spot gold rose 1.97% to $4,153.54 an

ounce and spot silver rose 3.47% to $65.90 an ounce.

Earlier, U.S. producer prices increased more than expected in

May, leading to the largest annual gain in 3-1/2 years as the

Middle East conflict drove up the cost of energy products. On

the labor market side, the number of Americans filing claims for

unemployment benefits increased marginally last week, pointing

to continued labor market resilience in early June.