By Chris Prentice and Stella Qiu

NEW YORK/SYDNEY, May 16 (Reuters) - Wall Street was lower on Friday though global equities were still poised for weekly gains, as upbeat earnings helped sustain the rally sparked by a U.S.-China trade truce.

Oil prices remain relatively low, further supporting stocks and bonds.

U.S. consumer sentiment slumped further in May as one-year inflation expectations surged as households remained concerned about the economic impact of President Donald Trump's aggressive and often erratic trade policy, a University of Michigan survey showed.

Yields on U.S. Treasuries fell after data showed weaker housing starts than expected.

Wall Street's main indexes were lower on Friday, but were still on track for a robust weekly gain. MSCI's gauge of stocks across the globe .MIWD00000PUS retreated 0.09%.

The Down Jones Industrial Average .DJI fell 0.03%, the S&P 500 .SPX retreated 0.07% and the Nasdaq Composite .IXIC was down 0.27%.

It had largely been a positive week for global equity markets, as investors cheered a tariff truce between the United States and China that greatly reduces the risk of a global recession.

"The risk-on mood is still here on markets," said Nabil Milali, strategist Multi-Asset & Overlay at Edmond de Rothschild, also pointing to news that the European Union and the U.S. have agreed to intensify talks on a possible trade agreement, and a better-than-expected earnings season.

"The fact that we have more positive surprises is a very good thing for European stocks."

The pan-European STOXX 600 .STOXX index rose 0.13% and was set for its fifth straight week of gains.

U.S. import prices unexpectedly rose in April as a surge in the cost of capital goods offset cheaper energy products.

"We are in the early stages of a trade transition. As of April, the impacts are unclear; however, we know that uncertainty pushed residential builders off balance," said Jeffrey Roach, Chief Economist for LPL Financial in Charlotte, North Carolina, on import prices and housing and building data.

MSCI's main gauge of Asia-Pacific stocks ex-Japan .MIAPJ0000PUS rose more than 3% this week, and the S&P 500 is up 4.5% so far .SPX.

Oil prices have been choppy this week, rising on the U.S.-China deal, before falling 2% on Thursday on increased supply pressure from an OPEC+ output hike and the prospect of an Iranian nuclear deal.

Brent futures LCOc1 recovered slightly on Friday, and were set to end the week higher. O/R

Oil prices - low by recent standards - are helping support expectations that inflation is easing, as is Thursday's U.S. data, which did not show any dramatic impact from U.S. tariffs, helping both shares and bonds.

U.S. core retail sales were soft and producer prices fell unexpectedly in April, increasing market bets to 57 basis points of easing from the Federal Reserve this year, from 49 bps.

"The relief from softer U.S. retail sales and PPI was palpable in the bond market yesterday and overnight," said Kenneth Broux, head of corporate research FX and rates at Societe Generale.

"This poured cold water on the (global) bond sell-off and put the brakes on the hawkish repricing of the Fed outlook."

The benchmark 10-year Treasury yield US10YT=TWEB fell 2.2 basis points, extending Thursday's drop. Euro zone government bond yields were also lower. GVD/EUR US/

Walmart WMT.N, the world's largest retailer, said it would have to start raising prices later this month due to the high cost of tariffs.

"The relief is just temporary," Edmond de Rothschild's Milali said, as the tariff shock is still "very significant."

The dollar edged higher against a basket of currencies =USD.FRX/

Spot gold XAU= fell 2.12% to $3,171.20 an ounce, erasing the previous session's gains.GOL/

(Reporting by Chris Prentice, Stella Qiu and Linda Pasquini; Editing by Hugh Lawson, Amanda Cooper, Kirsten Donovan and Deepa Babington)

((yifan.qiu@thomsonreuters.com))

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