Updates to midday

By Caroline Valetkevitch and Alun John

NEW YORK/LONDON, Dec 9 (Reuters) - Major stock indexes and the dollar edged higher on Tuesday as investors turned their attention to the Federal Reserve meeting and as investors digested news that Washington is allowing Nvidia's second-best chips to be exported to China.

Treasury yields were little changed after erasing earlier declines on U.S. labor market data. The greenback extended gains after the data, which showed U.S. job openings increased modestly in October, while hiring remained subdued.

U.S. President Donald Trump said Washington will allow Nvidia's NVDA.O H200 processors, its second-best artificial intelligence chips, to be exported to China, collecting a 25% fee on such sales. Shares of Nvidia were down 0.3%.

The Fed is widely expected to announce on Wednesday a cut in interest rates, but investors expect policymakers to remain divided.

"It's the quiet before the storm. We have a big Fed meeting tomorrow - a big catalyst," so it's normal to have mild market moves right now, said Adam Sarhan, chief executive of 50 Park Investments in New York.

Traders now see an 89.6% chance of a 25-basis-point rate cut this week, according to CME's FedWatch Tool.

Earlier, the Reserve Bank of Australia held rates steady as expected on Tuesday. More notably, however, it ruled out further policy easing and warned that rates could move higher if inflation pressures prove stubborn. The Australian dollar AUD= advanced 0.4% to US$0.6647.

The U.S. dollar index =USD which measures the greenback's strength against a basket of six currencies, rose 0.2% to 99.22.

The Bank of Canada and Swiss National Bank are both expected to hold rates steady when they meet on Wednesday and Thursday respectively.

The Dow Jones Industrial Average .DJI rose 126.30 points, or 0.27%, to 47,865.62, the S&P 500 .SPX rose 17.84 points, or 0.26%, to 6,864.35 and the Nasdaq Composite .IXIC rose 60.27 points, or 0.26%, to 23,606.54.

MSCI's gauge of stocks across the globe .MIWD00000PUS rose 1.11 points, or 0.11%, to 1,009.15. The pan-European STOXX 600 STOXX index fell 0.1%.

Also, European Central Bank board member Isabel Schnabel said on Monday that the next move in euro interest rates is more likely to be up - even if it is not on the immediate horizon - and warned that leaving rates unchanged for too long could bring a passive easing of monetary policy.

Those remarks sent yields on shorter and longer-dated German government bonds to their biggest daily rise in months on Monday.

In the Treasury market, the yield on benchmark U.S. 10-year notes US10YT=RR fell 0.2 basis points to 4.17%, from 4.172% late on Monday.

White House Economic Adviser and top contender for the next chair, Kevin Hassett, said Monday that the Fed should continue to lower interest rates. And that will raise questions about how the Fed will operate in the medium term.

U.S. crude CLc1 fell 1.09% to $58.24 a barrel and Brent LCOc1 fell to $61.94 per barrel, down 0.9% on the day.

Also in the foreign exchange market, the yen JPY= was softer. It weakened immediately in the wake of a powerful earthquake that rocked Japan on Monday.

(Reporting by Caroline Valetkevitch in New York and Alun John in London, with additional reporting by Ankur Banerjee in Singapore; Editing by David Goodman and Nick Zieminski)

((caroline.valetkevitch@thomsonreuters.com ))