GLOBAL MARKETS-US stocks turn lower, Germany and euro buoyed by election results

Updates for midmorning U.S.

By Alden Bentley, Harry Robertson and Wayne Cole

NEW YORK/LONDON/SYDNEY, Feb 24 (Reuters) - Wall Street stumbled early on Monday after attempting to recover from last week's late slump and Treasury yields likewise dipped, while German election results helped European shares and investors waited for Nvidia's midweek earnings report.

The euro's EUR= positive reaction to a conservative election victory in Germany, the currency bloc's largest economy, capped the dollar.

U.S. stocks opened firmer on the back of a futures rebound, but then succumbed to more of the same uncertainty about U.S. growth and valuations and geopolitics that helped knock the S&P 500 .SPX back from record highs set early last week.

The S&P 500 .SPX was off 0.30% and the Nasdaq Composite .IXIC fell 0.88%. The Dow Jones Industrial Average .DJI was slightly firmer.

In recent sessions, weak U.S. retail sales, consumer confidence and services purchasing managers' reports, combined with higher-than-expected consumer price inflation have eroded market confidence and, amid uncertainty over a barrage of federal government layoffs, have put U.S. stagflation in the forefront of market thinking.

"Now we're looking at other things, whether it's uncertainty, geopolitical, whether we're finally looking at earnings and things like that affect markets," said Joe Saluzzi, co-head of equity trading at Themis Trading.

Saluzzi said investors are distracted by German elections, the war in Ukraine, and a range of other headlines. "People get scared quick."

U.S. markets opened to a rally in German stocks and the euro, which reached a one-month high after Germany’s election result put centrist parties on track to form a coalition.

Friedrich Merz was set to become Germany's next chancellor after his opposition conservatives won the national election on Sunday. Merz should be able to form a coalition to govern with the ruling centre-left Social Democrats, even though the party came third behind the far-right Alternative for Germany.

"In the end (it was) a result that was close to the latest exit polls and should be a very market-friendly outcome," said Peter Schaffrik, global macro strategist at RBC Capital Markets.

The euro EUR=EBS rose to a one-month high of $1.0528 before paring to last trade 0.1% higher at $1.0469.

Germany's DAX stock index .GDAXI rose 0.16%. The pan-European STOXX 600 index .STOXX turned 0.33% lower.

MSCI's gauge of stocks across the globe .MIWD00000PUS fell 0.38%.

German coalition talks start as EU leaders are set to hold an extraordinary summit on March 6 to discuss additional support for Ukraine and how to pay for European defence needs.

This week marks three years since Russia began its full-scale invasion of Ukraine.

Wall Street took a hit on Friday when a survey on services showed a slide in activity amid concerns about tariffs and cost pressures.

The pullback has raised the stakes for Nvidia's NVDA.O results on Wednesday when investors will be looking for further rapid growth in revenue.

The Federal Reserve's favoured measure of core inflation is due on Friday and expected to show a slowdown to 2.6% from 2.8%, but any impact could be clouded by the focus on President Donald Trump's reliance on import tariffs as a tool for economic policy and leverage over trade partners, which could be inflationary.

A survey of U.S. consumers out on Friday showed inflation expectations for the next five years climbed to 3.5%, the highest since 1995.

The dollar index =USD, which tracks the currency against six peers, was off slightly at 106.62. The euro EUR= was up 0.07% at $1.0465.

The U.S. currency rose 0.19% against the yen JPY=EBS to 149.59, after sliding last week on the back of rising expectations of further rate hikes from the Bank of Japan.

In commodity markets, gold was up 0.01% at $2,936.37 an ounce XAU=, near a record high after climbing for eight weeks in a row. GOL/

Oil has been heading in the other direction, in part on speculation an eventual peace deal on Ukraine could lead to an easing of sanctions on Russia that could boost its fuel exports. O/R

Brent LCOc1 was at $74.61 per barrel, up 0.24% on the day. U.S. crude CLc1 rose 0.16% to $70.51 a barrel.

The yield on benchmark U.S. 10-year notes US10YT=RR was off 0.8 basis points from late Friday at 4.412%.

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