GLOBAL MARKETS-Stocks pare losses with Ukraine optimism countering tariff fears

By Sinéad Carew and Alun John

NEW YORK/LONDON, March 11 (Reuters) - Equities regained some lost ground on Tuesday as investors took encouragement from Ukraine's agreement to a ceasefire with Russia, even as they feared the economic impact of U.S. tariffs.

Ukraine agreed to an immediate 30-day ceasefire during talks with U.S. officials in Saudi Arabia and U.S. Secretary of State Marco Rubio said this left the ball in Russia's court to respond.

This was after President Donald Trump added to economic jitters by saying he told his commerce secretary to add an additional 25% tariff on all U.S. steel and aluminum imports from Canada, bringing the total tariff on those products to 50%.

"Uncertainty and volatility continue in this market," said Mona Mahajan, head of investment strategy at Edward Jones, pointing to Trump's latest tariff announcement and resulting concerns about the economy.

"Economic growth had started to slow even before the tariff uncertainty in the U.S. That is not uncommon in the first quarter of the year, but what is uncommon is adding to that with uncertainty around policy."

On Monday, the S&P 500 .SPX suffered its biggest one-day drop this year after Trump, in a weekend Fox News interview, declined to rule out a recession resulting from his trade policies, and talked about a "period of transition."

Adding to concerns about tariffs, Tuesday's data showed U.S. small-business confidence dropped for a third straight month in February, wiping away much of the gains notched after Trump's November election victory.

Along with the confidence slump, Phil Blancato, chief market strategist at Osaic Wealth in New York, pointed to guidance from Delta Airlines DAL.N and retailer Kohl's KSS.N that suggested a softening of consumer spending ahead.

Investors were also anxiously awaiting the latest information on inflation conditions from the U.S. consumer price index reading for February, due on Wednesday.

A high reading would add to last month's hotter-than-expected data, which included the biggest monthly price gain since August 2023.

At 2:52 p.m. EDT (1852 GMT) the Dow Jones Industrial Average .DJI was down 188.56 points, or 0.45%, to 41,716.72.

After spending most of the morning lower and going 10% below its latest record-high close, the S&P 500 .SPX was up 11.45 points, or 0.2%, at 5,624.63 and the Nasdaq Composite .IXIC rose 182.80 points, or 1.05%, to 17,645.07.

MSCI's gauge of stocks across the globe .MIWD00000PUS was down 0.85 points, or 0.1% at 831.88, after falling as low as 822.44, which was more than 7% below its most recent record close on February 19.

Earlier, the pan-European STOXX 600 .STOXX index had closed down 1.7%.

After falling sharply on Monday, U.S. Treasury yields also steadied, pulling away from five-month lows hit earlier in the session.

The yield on benchmark U.S. 10-year notes US10YT=RR rose 7.8 basis points to 4.291%, from 4.213% late on Monday.

The 2-year note US2YT=RR yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 4.5 basis points to 3.941%.

In currencies, the U.S. dollar rose to a one-week high against the Canadian dollar while the euro hit a new four-month peak against the greenback on hopes for a German defence spending deal.

The euro EUR= was up 0.9% at $1.0928 but against the Japanese yen JPY=, the dollar strengthened 0.38% to 147.82.

The Canadian dollar CAD= strengthened 0.26% versus the greenback to C$1.44 per dollar.

Oil prices rose, after falling sharply on Monday, although gains were capped as concerns mounted over a U.S. slowdown and the impact of tariffs on global economic growth.

U.S. crude CLc1 settled up 0.33% at $66.25 a barrel and Brent LCOc1 settled at $69.56 per barrel, up 0.4%.

Gold prices gained after selling off in the prior day's session, rising 1.01% to $2,918.63 an ounce. U.S. gold futures GCc1 rose 0.85% to $2,915.50 an ounce.