* U.S. stocks mostly up after trade war worry selloff
* Fed's Powell repeats case for gradual rate hikes
* Euro stays lower against dollar after comments by ECB's Draghi (Updates with late-morning U.S. markets activity, changes byline, dateline, previous LONDON)
By Caroline Valetkevitch
NEW YORK, June 20 (Reuters) - Stocks on world markets edged higher on Wednesday, recovering from a recent selloff on rapidly escalating China-U.S. trade tensions, while Treasury yields rose after the Federal Reserve chairman said the U.S. central bank should continue with a gradual pace of interest rate increases.
Fed Chairman Jerome Powell said the pace should stay the same given that the labor market does not seem to be overly tight. S&P 500 edged higher along with the Nasdaq, with technology shares providing support.
Boeing (NYSE:BA) BA.N also rose after selling off on trade war worries the day before.
"A lot of people believe the track that the (U.S.) president is taking is a negotiation tactic. And the people who still think the trade war will develop, believe it would be China that comes to the table with concessions first," said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York.
The Dow Jones Industrial Average erased its year-to-date gains on Tuesday after President Donald Trump's latest tariff threats against Chinese goods. Dow Jones Industrial Average .DJI fell 44.72 points, or 0.18 percent, to 24,655.49, the S&P 500 .SPX gained 6.34 points, or 0.23 percent, to 2,768.93 and the Nasdaq Composite .IXIC added 55.39 points, or 0.72 percent, to 7,780.97.
The pan-European FTSEurofirst 300 index .FTEU3 rose 0.46 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.41 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.72 percent higher, while shares in Hong Kong, Seoul and mainland Chinese indexes .HSI .KS11 CSI300 also rose.
Helping those shares was a state radio report that China will use targeted cuts in banks' reserve requirement ratios and other monetary policy tools to boost credit for small firms. comments boosted yields in the U.S. Treasury market.
Benchmark 10-year notes US10YT=RR last fell 5/32 in price to yield 2.9114 percent, from 2.893 percent late on Tuesday. Before Powell's remarks, U.S. yields had been little changed. euro held slim losses against the dollar as European Central Bank President Mario Draghi said the factors holding back local wages are subsiding and the ECB is confident inflation in the euro zone would move toward its 2-percent goal. dollar index .DXY fell 0.09 percent, with the euro EUR= down 0.03 percent to $1.1585.
In commodities markets, copper prices eased again after an inventory rise highlighted healthy supplies, extending declines from Tuesday tied to trade war worries. CMCU3 lost 0.94 percent to $6,776.00 a tonne.
U.S. crude CLcv1 rose 1.63 percent to $66.13 per barrel and Brent LCOcv1 was last at $75.19, up 0.15 percent.
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