GLOBAL MARKETS-Inflation fears spook US stocks, Treasury yields jump

* US CPI rose 0.8% in April vs 0.2% forecast

* MSCI’s global stock gauge down for third straight day

* U.S. Treasury jump on inflation data

* World FX rates

NEW YORK, May 12 (Reuters) - U.S. stocks fell again on Wednesday as benchmark Treasury yields jumped after data showed consumer prices unexpectedly rose by the most in nearly 12 years in April, prompting bets on earlier interest rate hikes.

Moments after data showed the U.S. consumer price index jumped 0.8% last month, outpacing a 0.2% forecast, the dollar spiked, only to tumble minutes later to stand little changed.

The gyrations in financial markets underscored concerns among some investors that the Federal Reserve could be wrong in its prediction that inflation pressures in the United States are “transitory”, and that the central bank may have to raise rates sooner than it currently expects to.

“We’ve been warning about the prospect of higher for longer inflation in the United States for many months, but even we hadn’t predicted this,” said James Knightley, chief international economist at ING Group, adding that there is evidence of “broadening price pressures”.

“We increasingly doubt the Fed’s position that this is transitory and think they will end up hiking rates far sooner than 2024.”

The prospect of tighter monetary policy knocked shares lower. The Dow Jones Industrial Average shed 0.65%, the S&P 500 dropped 0.81% and the Nasdaq Composite slipped 1.4%.

Weakness on Wall Street mirrored stock market losses elsewhere, as surging commodity prices stoked inflation concerns. MSCI’s broadest index of Asia-Pacific shares outside Japan had slumped 0.95% overnight, after hitting its lowest level since March 26.

The unexpectedly strong inflation data lifted U.S. Treasury yields. The benchmark 10-year Treasury yield climbed to 1.6737%, and the two-year Treasury yield also rose to stand at 0.1708%.

The dollar, which could benefit from rate hikes, struggled however to hang onto gains made moments after the release of the inflation data.

The dollar index, which measures the greenback against six major currencies, was steady at 90.595.

Higher Treasury yields weighed on gold prices. Spot gold fell 0.3% to $1,831.36 an ounce.

Oil prices were firm, helped by signs of a speedy economic recovery and upbeat forecasts for energy demand, although waves of COVID-19 infections in India and Brazil curbed gains.

U.S. crude jumped 1.73% to $66.4 a barrel. Brent crude leapt 1.6% to $69.71 per barrel.

In cryptocurrencies, ether was off a new record high struck overnight but was still firm at $4,357.07. The value of the second-biggest digital token has surged over 5.5 times so far this year.

Reporting by Koh Gui Qing in New York, Tom Arnold in London and Swati Pandey in Sydney; additional reporting by Sujata Rao in London; editing by Mark Heinrich