* Three major US stock indexes down more than 1% by afternoon

* U.S. dollar, yields gain after CPI data

* U.S. oil prices end higher

NEW YORK, Feb 13 (Reuters) - World stock market indexes fell while the U.S. dollar hit three-month peaks and Treasury yields climbed on Tuesday after data showed U.S. inflation slowed less than expected in January.

The U.S. consumer price index report reinforced expectations that the Federal Reserve will hold interest rates steady in March.

Investors reined in bets on how much the Fed will cut rates this year.

The consumer price index increased 0.3% last month after gaining 0.2% in December, the Labor Department's Bureau of Labor Statistics said on Tuesday. Annual revisions to the CPI data published last Friday were mixed, but generally showed inflation was on a downward trend after surging in 2022.

Economists polled by Reuters had forecast the CPI gaining 0.2% on the month and rising 2.9% year-on-year.

The inflation rate has fallen from a peak of 9.1% in June 2022, causing the Fed to call time on rate hikes and start thinking about cuts.

"Markets are taking it pretty hard because it puts a nail in the coffin of early (March) Fed rate cuts," said Carol Schleif, chief investment officer at BMO Family Office in Minneapolis, Minnesota. "It's evidence of a still-sturdy economy. There's still inflation to be wrung out of the system."

The Dow Jones Industrial Average fell 666.18 points, or 1.72%, to 38,131.04, the S&P 500 lost 82.44 points, or 1.64%, to 4,939.40 and the Nasdaq Composite lost 304.13 points, or 1.91%, to 15,638.24.

U.S. stocks have been trading at record highs, boosted by the big technology companies and expectations the Fed will soon cut rates.

The MSCI world equity index, which tracks shares in 49 nations, lost 1.34%. The Europe-wide Stoxx 600 index was last down 1.2%, having traded 0.47% lower before the data.

The dollar hit a three-month peak against the Japanese yen, topping 150 yen for the first time since November.

The dollar was last up 1.01% against the yen at 150.85 . The euro was down 0.6% on the day at $1.0703, while the dollar index, which tracks the greenback against a basket of currencies of other major trading partners, was up 0.7% at 104.92.

In cryptocurrencies, bitcoin touched its highest since December 2021 at $50,383, but was last down 1.4% at $49,128.

The yield on benchmark 10-year Treasury notes rose to 4.3123% compared with its U.S. close of 4.17% on Monday.

Investors on Tuesday were pricing in around 94 basis points of cuts from the Fed by the end of the year, down from around 112 before the CPI data.

They saw a 40% chance of the first cut coming by May, compared with 71% previously, according to money market pricing.

Around 145 basis points of cuts were priced in at the start of February, but strong economic data has caused investors to dial down their expectations.

Also due this week are U.S. retail sales data and a U.S. producer prices report.

Oil prices rose after the United States, according to sources, rejected Russian President Vladimir Putin's suggestion of a ceasefire in Ukraine. U.S. crude rose 95 cents to settle at $77.87 a barrel, while Brent crude 64 cents to $82.64.

Gold prices fell below the key $2,000 per ounce level to a two-month low following the CPI data.

(Reporting by Caroline Valetkevitch in New York and Harry Robertson in London; additional reporting by Sinead Carew in New York; Editing by Marguerita Choy and Jonathan Oatis)