GLOBAL MARKETS-US stocks, dollar fall on lingering tariff worries, day after relief rally

By Caroline Valetkevitch

NEW YORK, April 10 (Reuters) - Major stock indexes extended sharp declines and the dollar weakened further in midday Thursday trading, with the Nasdaq down more than 5% as investors remained skittish, a day after U.S. President Donald Trump's move to temporarily lower tariffs on many countries caused a massive relief rally.

U.S. Treasury prices were still slightly higher after this week's sharp bond selloff.

Investors are worried as much uncertainty remains on the tariff front and the trade war's potential economic fallout. Trump on Wednesday also said he would raise the tariff on Chinese imports, and the White House said a 10% blanket duty on almost all U.S. imports will remain in effect.

"The realization is that while we got some good news yesterday, we still have to live in a world where there's new uncertainty," said Art Hogan, chief market strategist at B Riley Wealth in New York.

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

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.

"There will still be a lot of pulled guidance," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.

"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 1,721.71 points, or 4.18%, to 38,910.92, the S&P 500 .SPX fell 269.29 points, or 4.89%, to 5,190.10 and the Nasdaq Composite .IXIC fell 997.93 points, or 5.78%, to 16,134.67.

MSCI's gauge of stocks across the globe .MIWD00000PUS fell 13.46 points, or 1.71%, to 771.82.

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.

The pan-European STOXX 600 .STOXX index ended up 3.7%. China's CSI300 blue-chip index .CSI300 rose 1.3% and Hong Kong's Hang Seng Index .HSI advanced 2.1%.

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.

Against the Japanese yen JPY=, the dollar weakened 2.28% to 144.35. The euro EUR= was up 2.19% against the dollar.

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 yield on benchmark U.S. 10-year notes US10YT=RR fell 4.7 basis points to 4.349%, from 4.396% late on Wednesday. Yields move opposite to prices.