Updates at 4pm ET

By Isla Binnie

NEW YORK, Sept 16 (Reuters) -Tech stocks dragged on U.S. indexes and the dollar touched a more than one-year low against the yen on Monday as all eyes looked to a Federal Reserve meeting later this week that is expected to usher in a hotly anticipated easing cycle.

Expectations have grown that the Federal Reserve could cut interest rates by as much as half a point - more than previously expected- in a bid to keep the economy on course for a soft landing, while managing slowing jobs growth and moderating inflation. The decision is slated for Wednesday.

Rate-sensitive tech stocks dipped, pulling down the Nasdaq Composite .IXIC. Nvidia NVDA.O and Apple AAPL.O shed more than 2% each, hampered by apessimistic report on demand for the iPhone.

The S&P 500 .SPX nonetheless eked out a slight gain on the day. Away from growth plays, the blue-chip Dow Jones Industrial Average .DJI hit an intraday record high.

XTB research director Kathleen Brooks said markets would look past the size of any rate cut on Wednesday to understand the Fed's rationale.

"If the Fed does start by cutting 50 bps, but at the same time reiterates that it is doing so to preserve the economy's soft landing, this is stock-market positive. If it sounds like the Fed has to panic-cut interest rates because of some gray cloud on the horizon, then expect stocks to sell off," she said.

The dollar index =USD, which measures the greenback against a basket of currencies, fell 0.33% at 100.69. Against the Japanese yen JPY=, the dollar sagged 0.13% at 140.63.

Investors also digested news from Sunday of a second assassination attempt on Republican presidential candidate Donald Trump. Shares in his Trump Media & Technology DJT.O company reversed early gains to trade down more than 3% by the market close. Restrictions on sales of Trump Media shares by the former president and other company insiders will be lifted within the next 10 days, though Trump said Friday he will not sell his shares.

The Dow rose 0.55%, to 41,622.08, the S&P 500 gained 0.13%, to 5,633.09 and the Nasdaq Composite dropped 0.52%, to 17,592.13.

The S&P last week posted its strongest weekly performance this year.

Hopes for a big rate cut by the Fed have been boosting stocks for months. Some of the glow lingered in MSCI's All-World index .MIWD00000PUS, which rose 0.20%, to 828.55.

TREASURY YIELDS HIT LOWS

Yields on short-dated U.S. debt hit their lowest level in two years at one point on Monday. The return on the rate-sensitive two-year note was last 1.7 basispoints lower on the day, continuing a slide this month.

Benchmark 10-year yields US10YT=RR shrank for a second straight session, shedding 3.1 basis points to 3.618%, from 3.649% late on Friday.

Traders are placing a 59% chance of a half-point cut at the Fed's meeting on Wednesday, up from 30% a week ago, futures 0#FF: show. The odds narrowed sharply after media reports revived the prospect of more aggressive easing. FEDWATCH

Central banks in Japan and the UK also meet this week, with both expected to stand pat for now, while a packed data schedule includes U.S. retail sales and industrial production.

The Bank of England is expected to leave rates on hold at 5.00% when it meets on Thursday, though markets have priced in a 31% chance of another cut 0#BOEWATCH.

On Friday, it is the Bank of Japan's turn. The BoJ is widely expected to hold steady, though it may lay the groundwork for a further tightening in October. 0#BOJWATCH

Lower Treasury yields played in to the yen's strength against the dollar. The euro stayed higher, underpinned by the prospect of more rate cuts from the European Central Bank, keeping a lid on the currency at $1.1200. 0#ECBWATCH

Gold XAU= also felt the effects of lower borrowing costs, adding 0.22% to $2,582.39 an ounce, near an all-time peak of $2,588.81.

Oil prices rose as the effects of Hurricane Francine kept nearly a fifth of crude oil production in the Gulf of Mexico offline. O/R

Brent crude futures LCOc1 settled $1.14 higher at $72.75 a barrel. U.S. crude clocked in at $70.09 per barrel, $1.44 higher on the day.

Additional reporting by Wayne Cole in Sydney; Editing by Sharon Singleton, William Maclean, Ros Russell, Leslie Adler and Aurora Ellis

To read Reuters Markets and Finance news, click on https://www.reuters.com/finance/markets For the state of play of Asian stock markets please click on: 0#.INDEXA