London, Feb 27 Reuters European stock indexes rose slightly in early trading on Tuesday, as the equity rally slowed and investors weighed up the outlook for central bank rate cuts, ahead of key U.S. and European inflation data later in the week.

Global equity markets have surged so far this year, helped by investor enthusiasm around artificial intelligence AI and expectations that major central banks will cut rates.

The MSCI World Equity index hit fresh alltime highs last week, following chipmaker Nvidia39;s quarterly report.

At 0928 GMT on Tuesday it was steady just below last week39;s highs, up just 0.1 on the day.

MSCI39;s Europe index was up 0.2. London FTSE 100 and STOXX 600 were up by less than 0.1. Germany39;s DAX was up 0.4.

While stocks have rallied in recent months, bond markets have seen yields rise, as investors push back their expectations for rate cuts.

There39;s a bit of a divergence there between what bonds see and how equities are behaving, said Hani Redha, global multiasset portfolio manager at PineBridge.

When the market starts to feel a little saturated with all this AIhype, then the market starts to look around and say 39;oh, where are those rate cuts that we were expecting?39; and starts to realise that financial conditions will be tighter, and that39;s what can lead to a bit of consolidation, he said.

Markets have already pushed out the likely timing of a first Federal Reserve easing from May to June. Futures imply a little more than three…