*

Stocks mixed as economic worries meet rate cut hopes

*

CPI report on tap

*

Banks under pressure after Barr's bank capital plan

revisions

*

JPMorgan Chase's ( JPM ) interest income warning further rattles

sector

*

Oil dips as OPEC+ lowers demand forecast

(Updates to 16:02 EDT)

By Stephen Culp

NEW YORK, Sept 10 (Reuters) - The S&P 500 and the Nasdaq

gained ground while Brent crude prices hit a 3-1/2-year low on

Tuesday amid concerns over softening global demand a day ahead

of key inflation data.

Market participants were girding for the Labor Department's

consumer price index report, and the first debate between Vice

President Kamala Harris and former President Donald Trump, who

are locked in a tight race for the White House.

Data from China showing a spike in exports appeared to be in

anticipation of tighter tariffs from trading partners, including

the incoming U.S. administration.

Megacap tech and tech-related stocks helped boost the Nasdaq

, while the S&P 500 posted a more modest gain and the blue-chip

Dow finished in the red.

"It really feels like today is kind of a calm before the

storm," said Ryan Detrick, chief market strategist at Carson

Group in Omaha. "We obviously have the first presidential debate

between Trump and Harris later this evening, but then we have

the CPI inflation data tomorrow and investors are kind of on

strike right now with no major buying or selling."

Shares of big banks were under pressure after Federal

Reserve Vice Chair for Supervision Michael Barr unveiled

sweeping bank capital plan revisions.

The sector was further rattled after JPMorgan Chase ( JPM )

issued an interest income warning as interest rates are expected

to ease.

The warning from JPMorgan Chase ( JPM ) "is a reminder that there

still are some cracks in the economy as we head into the end of

the year," Detrick added.

Wednesday's CPI report is expected to show inflation

drifting closer to the Federal Reserve's 2% target, reflecting

Fed Chair Jerome Powell's belief that price growth is under

control, and softness in the labor market suggests the time has

come for an interest rate cut.

Financial markets are baking in a 71% likelihood that the

central bank will cut its Fed funds target rate by 25 basis

points at the conclusion of its monetary policy meeting next

week, with a 31% chance of a supersized 50 basis point rate cut,

according to CME's FedWatch tool.

"Investors are firmly focused on what the Fed is going to

do, and on economic reports," said Oliver Pursche, senior vice

president at Wealthspire Advisors, in New York. "So far, the

data indicates that the most likely scenario is a soft landing

or very mild recession."

The Dow Jones Industrial Average fell 92.63 points,

or 0.23%, to 40,736.96; the S&P 500 gained 24.47 points,

or 0.45%, to 5,495.52; and the Nasdaq Composite added

141.28 points, or 0.84%, to 17,025.88.

European stocks lost ground, weighed by bank and energy

stocks as investors took a cautionary stance ahead of the U.S.

inflation data and an anticipated rate cut from the European

Central Bank later in the week.

The pan-European STOXX 600 index lost 0.54% and

MSCI's gauge of stocks across the globe gained

0.17%.

Emerging market stocks lost 0.07%. MSCI's broadest index of

Asia-Pacific shares outside Japan closed 0.07%

higher, while Japan's Nikkei lost 0.16%.

U.S. Treasury yields dipped ahead of the debate and

Wednesday's CPI report.

Benchmark 10-year notes last rose 14/32 in price

to yield 3.6479%, down from 3.699% late on Monday.

The 30-year bond last rose 20/32 in price to

yield 3.9648%, down from 3.999% late on Monday.

The dollar was last nominally higher against a basket of

world currencies.

The dollar index rose 0.06%, with the euro

down 0.07% to $1.1026.

The Japanese yen strengthened 0.60% versus the

greenback at 142.33 per dollar, while Sterling was last

trading at $1.3085, up 0.10% on the day.

Oil prices slid and Brent dipped below $70 per barrel for

the first time since December 2021 as a lower demand forecast

from OPEC+ offset potential U.S. supply concerns due to Tropical

Storm Francine.

U.S. crude tumbled 4.31% to settle at $65.75 per

barrel, while Brent settled at $69.19 per barrel, off

3.69% on the day.

Gold firmed above the $2,500 level as investors positioned

themselves ahead of the CPI report.

Spot gold added 0.5% to $2,516.61 an ounce.