GLOBAL MARKETS-Bitcoin drops to lowest since Jan; stocks fall before Fed minutes

* U.S. stocks down sharply in early trading

* Cryptocurrencies hit by fresh China measures

* Treasury yields decline (Updates with early U.S. markets activity, changes byline, dateline, previous LONDON)

NEW YORK, May 19 (Reuters) - Stock indexes fell globally on Wednesday ahead of minutes from the U.S. Federal Reserve, while cryptocurrencies plunged after regulatory moves from China, with bitcoin dropping to its lowest level since January.

Equity investors worry that rising inflationary pressures as evidenced by stronger-than-expected consumer price readings could prompt the Fed to pare back its support sooner than many anticipate.

“There is no question that inflation worries have creeped into the investor mindset, which will weigh on the tech stocks and in all likelihood we will see yields go up,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

The Fed has stuck to the narrative that a recent rise in inflation would be transient and that it therefore should keep its easy monetary policy settings, and many investors expect minutes from the Fed’s April’s meeting to repeat that message.

The Dow Jones Industrial Average fell 437.24 points, or 1.28%, to 33,623.42, the S&P 500 lost 45.5 points, or 1.10%, to 4,082.33 and the Nasdaq Composite dropped 107.25 points, or 0.81%, to 13,196.39.

The pan-European STOXX 600 index lost 1.52% and MSCI’s gauge of stocks across the globe shed 1.05%.

As the global recovery takes hold, British consumer price inflation more than doubled to 1.5% in April, data showed on Wednesday.

Euro zone inflation picked up the same month, with consumer prices rising 0.6% month-on-month for a 1.6% year-on-year increase.

Bitcoin plunged to its lowest level since January following China’s decision to ban financial and payment institutions from providing digital currency services.

Rival cryptocurrency Ethereum sank 28% to $2,444.

But the U.S. dollar steadied amid the broad equity market sell-off.

The dollar index rose 0.091%, with the euro down 0.05% to $1.2214.

Yields on U.S. Treasury debt and breakevens, an inflation bellwether, fell as investors took a cautious stance after the plunge in digital currencies.

The yield on 10-year Treasury notes fell 2.0 basis points to 1.6216% and the breakeven rate on five-year U.S. Treasury Inflation-Protected Securities (TIPS) was last at 2.675%.

Oil prices dropped on renewed demand concerns as coronavirus cases in Asia rise. Brent futures were down more than $2 a barrel. U.S. West Texas Intermediate (WTI) crude were also down more than $2 a barrel.

U.S. gold futures gained 0.92% to $1,884.90 an ounce.

Reporting by Carol Valetkevitch; additional reporting by Tom Arnold in London, Medha Singh and Shashank Nayar in Bengaluru, Herbert Lash and Stephen Culp in New York, and Hideyuki Sano in Tokyo; editing by Sam Holmes, Toby Chopra, William Maclean and Jonathan Oatis