By Sinéad Carew and Lawrence White

NEW YORK/ LONDON (Reuters) -MSCI’s global equities index was down slightly on Wednesday while the dollar rose and oil prices pared earlier gains, as investors digested U.S. economic data and anxiously awaited Israel’s response to Iran’s missile attack the previous day.

Oil prices rose on worries that further escalation in the Middle East could threaten oil supplies from the world’s top producing region, but gains were limited by a large build in U.S. crude inventories.

U.S. President Joe Biden said he would not support any Israeli strike on Iran’s nuclear sites and urged Israel to act “proportionally” in response to Iran’s biggest ever direct attack on Israel. Iran, after firing ballistic missiles on Israel on Tuesday, said early Wednesday that its attack was finished barring further provocation.

The dollar hit a three-week high against the euro after the ADP national employment report showed U.S. private payrolls increased more than expected in September ahead of Friday’s highly anticipated jobs data.

Longer-dated U.S. Treasury yields rose after the data pointed to a stable labor market while investors monitored Middle East hostilities.

“The markets are still bracing for any other geopolitical developments and settling a little after yesterday,” said Matt Miskin, co-chief investment strategist at John Hancock Investment Management.

Looking at the private payrolls data, Miskin said “the bond market is looking at the next Fed meeting and saying we’re probably not going to get a 50 basis point cut.”

A strike by 45,000 dockworkers halting shipments at U.S. East Coast and Gulf Coast ports entered its second day on Wednesday with no negotiations currently scheduled between the two sides, sources told Reuters.

On Wall Street, the Dow Jones Industrial Average rose 39.55 points, or 0.09%, to 42,196.52; the S&P 500 rose 0.79 point, or 0.01%, to 5,709.54; and the Nasdaq Composite rose 14.76 points, or 0.08%, to 17,925.12.

MSCI’s gauge of stocks across the globe fell 0.38 point, or 0.04%, to 845.49. Earlier the STOXX Europe 600 index closed up 0.05% at 521.14.

In energy markets, U.S. crude settled up 0.39% at $70.10 a barrel and Brent ended the session at $73.90 per barrel, up 0.46% on the day.

In Treasuries, the yield on benchmark U.S. 10-year notes rose 4 basis points to 3.783%, from 3.743% late on Tuesday, while the 30-year bond yield rose 4.9 basis points to 4.1299%.

The 2-year note yield, which typically moves in step with interest rate expectations, rose 1.4 basis points to 3.6352%, from 3.621% late on Tuesday.

A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at a positive 14.6 basis points.

In currencies, the dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.34% to 101.60.

The euro was down 0.16% at $1.1049 while the dollar strengthened 2% against the Japanese yen to 146.43.

In precious metals, spot gold fell 0.14% to $2,659.22 an ounce. U.S. gold futures fell 1.02% to $2,640.00 an ounce.

(Reporting by Sinéad Carew in New York, Johann M Cherian in Bengaluru, Lawrence White in London and Kevin Buckland in Tokyo; Editing by Chris Reese, Nick Zieminski and Jonathan Oatis)

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