GLOBAL MARKETS-Stocks drop after previous day's eye-popping relief rally; dollar also down

By Caroline Valetkevitch

NEW YORK, April 10 (Reuters) - Major stock indexes fell on Thursday, with the Nasdaq down more than 3% in early trading, after the previous session's massive relief rally on U.S. President Donald Trump's move to temporarily lower the heavy tariffs on many countries, while the U.S. dollar also sank.

U.S. Treasury prices moved higher after this week's sharp bond selloff.

The stock declines came despite U.S. data showing consumer prices unexpectedly fell in March.

"All things being equal, if tariffs are paused and inflation is going lower, it's green light go if you're an investor," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.

Amid the head-spinning changes in the market and news on tariffs, investors also are gearing up for the start of quarterly U.S. earnings, with results from some of the biggest U.S. banks including JPMorgan Chase JPM.N due on Friday.

More news is to come on the tariff front, so "there will still be a lot of pulled guidance," Dollarhide said.

"It may be that the market is taking back some of yesterday's rip-your-face-off rally because they realize some of the relief is not as great as they thought."

Markets have been roiled since Trump's announcement of sweeping tariffs late on April 2.

The Dow Jones Industrial Average .DJI fell 915.22 points, or 2.30%, to 39,693.23, the S&P 500 .SPX fell 153.61 points, or 2.81%, to 5,303.29 and the Nasdaq Composite .IXIC fell 592.43 points, or 3.46%, to 16,532.54.

MSCI's gauge of stocks across the globe .MIWD00000PUS fell 2.71 points, or 0.35%, to 782.57, while the pan-European STOXX 600 .STOXX index rose 4.32%.

Trump's reversal on tariffs on Wednesday pushed equities higher across the globe, starting with a 9.5% pop in the S&P 500 .SPX on Wednesday.

Stocks in Asia also rallied from Trump's announcement on tariffs, including in China, even though Trump on Wednesday also said he would raise the tariff on Chinese imports to 125%.

China's CSI300 blue-chip index .CSI300 rose 1.3%, while Hong Kong's Hang Seng Index .HSI advanced 2.1%.

Other tariffs also still stand. A 10% blanket duty on almost all U.S. imports will remain in effect, the White House said. The announcement also does not appear to affect duties on autos, steel and aluminium that are already in place.

Also, the European Union will put on hold for 90 days its first countermeasures against Trump's tariffs, European Commission President Ursula von der Leyen said on Thursday.

The onshore yuan CNY=CFXS fell to its weakest level since December 2007 at 7.3518 per dollar, before strengthening.

Against the Japanese yen JPY=, the dollar weakened 1.94% to 144.86, while the euro EUR= was up 1.73% against the dollar.

BONDS STABILIZE

U.S. Treasury prices edged higher after a solid 10-year note auction and pause in some trade tariffs on Wednesday helped the market stabilize from a sharp bond market selloff earlier this week.

The violent U.S. Treasury selloff in the previous sessions, evoking the COVID-era "dash for cash", had reignited fears of fragility in the world's biggest bond market.

Analysts attributed some of the move to large liquidations as hedge funds and other asset managers unwound trades and sold assets due to margin calls and losses.

The 10-year note yield US10YT=RR was last down 4.7 basis points on the day at 4.349%. Yields move opposite to prices.

Elsewhere, oil prices fell. U.S. crude CLc1 fell 4.33% to $59.65 a barrel and Brent LCOc1 was last at $62.94 per barrel, down 3.88% on the day.