Updated prices after U.S. market close

By Sinéad Carew and Yoruk Bahceli

Oct 1 (Reuters) -MSCI's global equities index fell with Treasury yields on Tuesday as investors shied away from riskier assets while oil futures rallied on concerns about supply after Iran launched missiles at Israel.

However Wall Street stocks ended above their session lows and Treasuries yields also pared declines on hopes that further escalation of the Middle East conflict was not imminent.

Earlier on Tuesday, Iran fired a salvo of ballistic missiles at Israel in retaliation for Israel's campaign against Tehran's Hezbollah ally in Lebanon. The United States condemned Iran's move and said it was consulting with Israel on a response after U.S. military forces helped Israel defeat the attack.

The U.S. dollar index rose and gold, traditionally a safe haven, rose during the session to more than 1% as investors looked for less risky places to put their money. Oil prices rallied as the escalating violence raised concerns about supply.

On top of geopolitical worries, U.S. investors worried about the aftermath of Hurricane Helene and the halt of about half of U.S. ocean shipping due to a strike by dockworkers on the East and Gulf Coasts after a midnight deadline passed with no sign of a new contract deal with port owners.

And adding extra pressure to equities, the S&P 500 and the Dow had ended Monday's session with record closing highs.

"Markets were priced for perfection. Then overnight we got a few extra wrinkles in the mix. The port strike is one. The hit east coast infrastructure took from the aftermath of hurricane Helene is another," said Carol Schleif, Chief Investment Officer at BMO family office in Minneapolis.

"Then you throw in the third factor of Iran firing missiles at Israel," said Schleif, noting that the attacks added to gains in the dollar and created demand for Treasuries. "Investors have been holding their breath hoping it wouldn't escalate."

Oil prices settled higher though below their highs of the day. Clay Seigle, an independent political risk strategist, said that an Israeli attack on Iranian oil production or export facilities could cause a material disruption, potentially more than a million barrels per day.

U.S. crude CLc1 settle up 2.44% at $69.83 per barrel and Brent LCOc1 settled at $73.56 per barrel, up 2.59% on the day. Earlier in the day, both crude benchmarks rose more than 5%.

On Wall Street the Dow Jones Industrial Average .DJI fell 173.18 points, or 0.41%, to 42,156.97, the S&P 500 .SPX fell 53.73 points, or 0.93%, to 5,708.75 and the Nasdaq Composite .IXIC fell 278.81 points, or 1.53%, to 17,910.36.

MSCI's gauge of stocks across the globe .MIWD00000PUS fell 6.09 points, or 0.71%, to 845.69. Earlier, Europe's STOXX 600 .STOXX index ended the day down 0.38%.

CBOE's market volatility index, Wall Street's fear gauge, .VIX rose to 19.25 - its highest closing level since Sept. 9.

In foreign exchange markets, the Japanese yen and Swiss franc, seen as safe haven currencies, had both gained ground as earlier reports pre-empted the attacks from Iran. The dollar was also helped by data showing resilient a U.S. labor market on Tuesday and a push back from Federal Reserve Chair Jerome Powell on Monday against bets on bigger interest rate cuts.

The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.45% to 101.20.

The euro EUR= was down 0.58% at $1.1069 and against the Japanese yen JPY=, the dollar weakened 0.08% to 143.51.

As investors looked to the safety of U.S. Treasuries, the yield on benchmark U.S. 10-year notes US10YT=RR fell 6.3 basis points to 3.739%, from 3.802% late on Monday.

The 2-year note US2YT=RR yield, which typically moves in step with interest rate expectations, fell 4.3 basis points to 3.6084%, from 3.651% late on Monday.

Referring to the Iran/Israel conflict, Jim Barnes, director of fixed income at Bryn Mawr Trust in Berwyn, Pennsylvania, said: "We'll just wait and see and hopefully this pause will hold and then the market will change their attention now back to some of the morning data, which obviously has more and longer-term implications for yields."

Precious metals, also seen as a safe haven asset in uncertain times, were in demand on Tuesday. Spot gold XAU= rose 0.91% to $2,658.39 an ounce. U.S. gold futures GCc1 rose 0.95% to $2,661.10 an ounce.

Reporting by Sinéad Carew, Chuck Mikolajczak, Scott DiSavino, Yoruk Bahceli and Ankur Banerjee; Editing by David Evans, Nick Zieminski and Deepa Babington

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