GLOBAL MARKETS-US stocks gain in choppy trade, as oil prices drop

Updated at 4:32 p.m. (2132 GMT

By Chris Prentice and Greta Rosen Fondahn

Feb 28 (Reuters) - Wall Street indexes advanced in choppy trading on Friday, after briefly dipping following a contentious White House meeting with Ukrainian President Volodymyr Zelenskiy.

Oil prices fell on worries stoked by the White House meeting, tariffs and Iraq's decision to resume exports from the Kurdistan region.

European shares ended flat but still notched another weekly gain.

An on-camera argument in the Oval Office broke out between U.S. President Donald Trump and the Ukrainian President over a possible cease-fire agreement in the Russia-Ukraine war.

"The market initially sold off because it was a heated and contentious conversation, which is not usually a good thing between two leaders of the world," said Adam Sarhan, chief executive of 50 Park Investments in New York.

"That's why the market sold off, but then cooler heads prevailed."

The S&P 500 climbed 1.59% to end the session at 5,954.50 points. The Nasdaq gained 1.63% to 18,847.28 points, while the Dow Jones Industrial Average rose 1.39% to 43,840.91 points.

Volume on U.S. exchanges was heavy, with 17.5 billion shares traded, compared with an average of 15.4 billion shares over the previous 20 sessions.

European stock futures fell, with the Dax FDXc1 and CAC40 futures FCEc1 down 0.6% and the Eurostoxx 50 futures STXEc1 dropping as much as 1.4%.

U.S. Treasury yields fell to new multi-month lows after a report closely tracked by the Federal Reserve showed annual inflation subsided and consumer spending slowed last month.

MSCI's gauge of stocks across the globe .MIWD00000PUS rose 5.69 points, or 0.66%.

Crypto prices tumbled as the Trump-fuelled boom fizzled.

Ukraine's dollar bonds were down on Friday but reacted mutedly to the meeting's chaos, holding on to earlier levels. The 2034 maturity XS2895056013=TE fell just over one cent in price, last bid at 59.04 cents on the dollar, and set for monthly gains. The country's international debt rallied strongly last year on hopes that Trump could negotiate an end to the three-year war with Russia, but bonds have wobbled over the past month as investors shift their views on the Trump administration's approach to Russia and how that will ultimately affect Ukraine's economy.

Earlier, the pan-European STOXX 600 .STOXX index ended flat.

The dollar index, which gauges the greenback against six major peers, =USD rose 0.21% to 107.59.

The euro EUR=EBS fell by as much as 0.37% to a two-week low of $1.036, before paring some of that decline to trade at $1.0366.

Emerging market stocks .MSCIEF fell 28.01 points, or 2.49%.

US DATA, TARIFF RISKS

The 12-month change in the U.S. personal consumption expenditures (PCE) price index fell to 2.5% last month from 2.6% in December, U.S. data showed.

The core PCE measure, the Fed's preferred measure of inflation, fell to 2.6% from an upwardly revised 2.9%. The central bank targets an inflation rate of 2%.

Both measures came in line with economists' expectations.

The threat of escalating tariffs has boosted the dollar, but it has also stoked worries about the impact of widespread duties on the U.S. economy.

The "report indicates that inflation remains sticky," said Peter Cardillo, chief market economist at Spartan Capital Securities.

"That means the pause will continue. And that means that the Fed may have a dilemma on its hands because the recent macro numbers are cooling and it shows signs of the economy cooling."

The prospect of higher U.S. tariffs sent jitters through markets and revived concerns about an escalating global trade war.

Trump said on Thursday that 25% duties on imports from Canada and Mexico will come into effect on March 4 - not April 2 as he had suggested a day earlier - and said goods from China will be subject to an additional 10% duty. This week he also floated 25% tariffs on shipments from the European Union.

Bitcoin BTC= fell 0.18% to $84,138.56

The yield on benchmark U.S. 10-year notes US10YT=RR fell 6 basis points to 4.227%, from 4.287% late on Thursday.

The 2-year note US2YT=RR yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 8.9 basis points to 3.991%, from 4.08% late on Thursday.

Spot gold XAU= fell 0.68% to $2,856.49 an ounce.

U.S. gold futures GCcv1 settled 1.6% lower at $2,848.50.

Brent crude futures LCOc1, which expired on Friday, settled at $73.18 a barrel, down 1.16%. U.S. West Texas Intermediate crude futures CLc1 finished at $69.76 a barrel, losing 0.84%.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 2.45% lower at 576.86, while Japan's Nikkei .N225 fell 1,100.67 points, or 2.88%, to 37,155.50.