By Chibuike Oguh and Harry Robertson

NEW YORK/LONDON (Reuters) -Global stocks rose in choppy trading on Tuesday as markets waited for President-elect Donald Trump to make more appointments to his incoming administration, while oil prices settled slightly higher as tensions mounted between Russia and the U.S. over Ukraine.

Trump’s pool for a Treasury secretary pick widened to include Apollo Global Management Chief Executive Marc Rowan and former Federal Reserve Governor Kevin Warsh.

Trump said he will nominate Howard Lutnick, chief executive of Wall Street brokerage firm Cantor Fitzgerald, to lead his trade and tariff strategy as head of the Commerce Department.

Markets are positioning for potential tariffs and tax cuts that could lead to higher inflation and fewer interest rate cuts by the Federal Reserve.

“We’ve hit our targets in terms of the S&P 500 and Dow and I think the market is in a great discounting mechanism with rate cuts and Trump,” said Bill Strazzullo, chief markets strategist at Bell Curve Trading in Boston.

“The biggest constraint on Trump is going to be the bond market because all his policies, including tariffs, deportations or tax cuts, will be inflationary.”

Benchmark S&P 500 and the Nasdaq pared early losses and finished higher, as gains in technology and communication services stocks outweighed losses in materials, energy and financial equities. Artificial intelligence chipmaker Nvidia is scheduled to report earnings on Wednesday.

The Dow Jones Industrial Average fell 0.28% to 43,268.94, the S&P 500 rose 0.40% to 5,916.98 and the Nasdaq Composite rose 1.04% to 18,987.47.

The yield on benchmark U.S. 10-year notes fell 2 basis points to 4.394%.

“I think it’s all the unknown; we’ve had the big unknown, which is how the election was going to go, now that’s known. But the next set of questions is what’s going to happen with Congress and with the White House,” said George Young, portfolio manager at Villere & Co in New Orleans.

“You can have less regulation and with it the possibility of more mergers and acquisition. The only thing that’s kind of a fly in the ointment is the bond market.”

Russia’s President Vladimir Putin lowered the threshold for a nuclear strike in response to a broader range of conventional attacks. He approved the change after two U.S. officials and a source familiar with the decision said President Joe Biden’s administration allowed Ukraine to use U.S.-made weapons to strike deep into Russia.

Europe’s main stock index fell to a three-month low, as investors shifted from risky assets to safe havens following Russia’s warning.

The pan-European STOXX 600 dropped to as low as 495.55, it lowest since early August. It finished down 0.45%. MSCI’s gauge of stocks across the globe added 0.42% to 849.15.

Oil prices rebounded from early session losses and settled slightly higher. Brent crude futures rose by a cent to settle at $73.31 per barrel, while U.S. West Texas Intermediate crude futures rose 0.3% to close at $69.39 a barrel.

The Swiss franc rose around 0.03% against the euro, while the dollar index – which tracks the U.S. currency against six peers – was down 0.04% to 106.18. Gold was last up 0.76% at $2,631.96 per ounce after hitting a one-week high. U.S. gold futures settled 0.6% higher at $2,631 per ounce.

“The market’s movement appears to be driven by this morning’s news about changes to Russia’s nuclear doctrine,” said Michael Weidner, co-head of global fixed income at Lazard Asset Management.

(Reporting by Chibuike Oguh in New York and Harry Robertson in London, Editing by Sam Holmes, Christina Fincher, Mark Heinrich, Alex Richardson, Timothy Heritage and David Gregorio)

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