Updates to afternoon U.S. trading

By Caroline Valetkevitch

NEW YORK, May 20 (Reuters) - Major stock indexes eased while U.S. Treasury yields rose on Tuesday as investors focused on a critical vote in Washington over U.S. President Donald Trump's sweeping tax cuts.

Trump went to Capitol Hill on Tuesday to encourage Republican lawmakers to resolve their differences over a bill that would extend the 2017 tax cuts from his first term, among other things.

Investors are worried the bill will lead to the U.S. budget deficit growing at a faster pace than previously expected. Moody's Investors Service downgraded the U.S. credit rating late on Friday, fanning concerns about the country's debt load.

"With the Republican bill still up in the air, there's just enough uncertainty to lead people to be a little bit more cautious and use this recent rally maybe to trim a little bit of their (stocks) portfolio," said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.

The S&P 500 on Monday had registered a sixth straight day of gains.

The Dow Jones Industrial Average .DJI fell 94.42 points, or 0.22%, to 42,697.62, the S&P 500 .SPX fell 14.66 points, or 0.25%, to 5,948.94 and the Nasdaq Composite .IXIC fell 37.09 points, or 0.19%, to 19,178.38.

Home Depot HD.N was down 0.3% with the broader market, although the home improvement retailer beat Wall Street estimates for first-quarter sales.

MSCI's gauge of stocks across the globe .MIWD00000PUS fell 0.07 points, or 0.01%, to 882.32.

European stocks closed at near nine-week highs, with utilities and telecom firms leading gains.

The pan-European STOXX 600 .STOXX index rose 0.73%.

China's blue-chip index .CSI300 climbed 0.54% after its central bank cut benchmark lending rates for the first time since October.

The yield on benchmark U.S. 10-year notes US10YT=RR rose 0.2 basis points to 4.477%, from 4.475% late on Monday.

The 30-year bond US30YT=RR yield rose 2.1 basis points to 4.9624% from 4.941% late on Monday, the highest since November 2023.

In a sign of broader market nervousness, Japanese super-long government bond yields soared to all-time highs on Tuesday, precipitated by a poor auction of 20-year securities. JP/

The Japanese 20-year yield JP20YTN=JBTC jumped as much as 15 bps to 2.555%, its highest since 2000, and the 30-year yield hit a record high of 3.14%. JP30YTN=JBTC

The U.S. dollar declined again as investors awaited more comments from Federal Reserve officials. Traders expect at least two 25-basis-point rate cuts from the Fed by the end of 2025.

In late morning trading, the dollar slipped against the yen, falling to a roughly two-week low of 144.095 yen. It was last down 0.1% at 144.64 yen JPY=, sliding in five of the last six sessions.

The Australian dollar fell sharply against the U.S. dollar after the Reserve Bank of Australia cut benchmark interest rates by 25 basis points and left the door open to further easing in the months ahead. The Aussie was last down 0.57% versus the greenback at $0.6416. AUD=D3

Canada's annual inflation rate eased to 1.7% in April, above economists’ expectations for a 1.6% gain. Two of the three core measures of inflation, which are closely watched by the Bank of Canada, also hit 13-month highs on underlying price pressures.

U.S. crude CLc1 rose 0.3% to $62.88 a barrel and Brent LCOc1 rose to $65.63 per barrel, up 0.14% on the day.

Gold prices rose more than 1% as the U.S. dollar weakened further. Spot gold XAU= rose 1.54% to $3,278.81 an ounce.

(Reporting by Caroline Valetkevitch in New York and Alun John in London; Additional reporting by Ankur Banerjee and Johann M. Cherian in Singapore; Editing by Emelia Sithole-Matarise, Joe Bavier and Nia Williams)

((caroline.valetkevitch@thomsonreuters.com))