GLOBAL MARKETS-Stocks edge up, US dollar dips as tariff uncertainty weighs

By Chuck Mikolajczak

NEW YORK, March 25 (Reuters) - Global stocks were slightly higher on Tuesday, after a sharp rally in the prior session on hopes U.S. President Donald Trump would take a more measured approach on tariffs than feared, while the dollar eased from a three-week high.

European shares paced the advance, while stocks on Wall Street oscillated between modest gains and declines in the wake of a sharp climb on Monday after Trump indicated that not all of his threatened levies would be imposed on April 2 and some countries may get breaks.

"There's a little bit of paralysis with market participants not knowing what to do because they don't know what policy is going to go into place," said Charles Ashley, portfolio manger at Catalyst Funds.

"We want to position ourselves to be insulated to the worst case scenario but at the same time we still look for opportunity."

After initially opening higher, U.S. stocks lost ground after a reading on consumer confidence from the Conference Board fell 7.2 points to 92.9 in March, below the 94.0 estimate, the latest in a string of sentiment readings that have shown cooling.

The Dow Jones Industrial Average .DJI fell 16.74 points, or 0.05%, to 42,566.58, the S&P 500 .SPX rose 0.94 points, or 0.02%, to 5,768.62 and the Nasdaq Composite .IXIC rose 34.72 points, or 0.19%, to 18,223.91.

MSCI's gauge of stocks across the globe .MIWD00000PUS rose 1.23 points, or 0.14%, to 852.96 while the pan-European STOXX 600 .STOXX index closed up 0.67%, buoyed by a survey from the Ifo institute that showed German business morale rose in March.

Stocks have shown signs of bottoming in recent days, after coming under pressure due to uncertainty over the tariff outlook and the potential to slow the global economy and dent corporate profits.

The dollar index =USD, which has strengthened on the tariff expectations and which measures the greenback against a basket of currencies, fell 0.2% to 104.09 after climbing to a three-week high of 104.46.

The euro EUR= was up 0.07% at $1.0808.

Against the Japanese yen JPY=, the dollar weakened 0.64% to 149.74 while sterling GBP= strengthened 0.32% to $1.2962.

U.S. Treasury yields were slightly lower as investors also assessed the impact tariffs could have on the Federal Reserve's monetary policy.

Fed Governor Adriana Kugler said the central bank's current policy remains restrictive and well-positioned, but progress towards the 2% inflation goal has slowed and the latest move higher in goods inflation data is "unhelpful."

Federal Reserve Bank of New York President John Williams said firms and households are “experiencing heightened uncertainty” about what lies ahead for the economy.

The comments come after Atlanta Federal Reserve President Raphael Bostic said on Monday he only sees one cut of 25 basis points from the Fed this year.

The yield on benchmark U.S. 10-year notes US10YT=RR dipped 2.7 basis points to 4.304%. Yields slightly extended declines after a sale of $69 billion in two-year notes US2YT=RR.

Crude prices reversed an earlier advance after the U.S. reached separate agreements with Ukraine and Russia to ensure safe navigation in the Black Sea and to implement a ban on attacks by the two countries on each other's energy facilities.

U.S. crude CLc1 fell 0.33% to $68.88 a barrel and Brent LCOc1 fell to $72.90 per barrel, down 0.14% on the day.