(Adds U.S. market open, byline, dateline; previous LONDON)
* European markets slide after China sell-off
* Treasury yields at seven-year highs, U.S. bond market closed
* Wall Street slightly lower as tech stocks, oil weigh
* Brazil markets soar on strong vote for far-right candidate
By Herbert Lash
NEW YORK, Oct 8 (Reuters) - A gauge of global equity markets slumped on Monday amid unease over the impact of the escalating U.S.-Sino trade war on China's growth, while the dollar gained versus the euro and Italian bond yields spiked on the ongoing spat over Italy's budget plans.
European markets slid, with defensive stocks under pressure as investor confidence took a knock from last week's spike in Treasury yields and amid heightened expectations for further interest rate hikes by the Federal Reserve.
The pan-European FTSEurofirst 300 index lost 1.15 percent and MSCI's gauge of stocks across the globe shed 0.44 percent.
The U.S. Treasury said it was concerned about the China's currency depreciation and that it was monitoring developments with the yuan, according to CNBC.
Beijing moved over the weekend to spur more lending. Spot yuan slid to its lowest official close in seven weeks against the dollar on expectations of more easing by China.
Chinese stocks fell in their biggest one-day drop since February after markets re-opened following a week-long holiday in China, with the Shanghai-Shenzhen CSI 300 index down more than 4 percent for only the second time in more than 2 1/2 years.
For the year, Chinese indexes are down about 18 percent.
Wall Street traded lower on a day the U.S. bond market was closed because of the Columbus Day holiday.
The Dow Jones Industrial Average fell 43.89 points, or 0.17 percent, to 26,403.16. The S&P 500 lost 3.5 points, or 0.12 percent, to 2,882.07 and the Nasdaq Composite dropped 27.27 points, or 0.35 percent, to 7,761.17.
Yields on the 10-year note were at seven-year highs, after a solid jobs report raised the specter of faster interest rate hikes.
"There's a hangover from last week's rapid move in yields and just because the bond market's closed, doesn't mean investors are not worried," said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.
Brazil's real currency hit a two-month high and stocks jumped after market-preferred presidential candidate Jair Bolsonaro's strong first-round win boosted investor confidence.
Gold fell more than 1 percent as investors sought refuge in the dollar, which has been lifted by recent strong U.S. economic data that have reinforced rate hike expectations.
Gold is down more than 12 percent from an April peak largely due to a strong dollar, which reflects a vibrant U.S. economy, rising U.S. rates and fears of a global trade war.
U.S. gold futures fell 1.31 percent to $1,189.80 an ounce.
"People are a bit nervous that China's government issued weaker economic outlook, therefore you see quite a reaction on gold markets," said ABN AMRO analyst Georgette Boele.
The dollar index rose 0.27 percent, with the euro down 0.42 percent to $1.1475. The Japanese yen strengthened 0.50 percent versus the greenback at 113.16.
Oil dropped to around $83 a barrel, pressured by expectations that some Iranian oil exports will keep flowing after the U.S. re-imposes sanctions, easing a strain on supplies.
U.S. crude fell 64 cents to $73.70 per barrel and Brent was last down 79 cents at $83.37.
Reporting by Herbert Lash Editing by Nick Zieminski