(Updates prices, changes comment, dateline from previous LONDON)
* U.S. President Trump steps up rhetoric on North Korea
* Measure of global stock market cap drops $1 trillion
* Yen touches 4-month high vs dollar
By Rodrigo Campos
NEW YORK, Aug 11 (Reuters) - Wall Street put a floor under global equities on Friday after a weak inflation reading brought investors back into U.S. technology and other stocks, but gold and the yen still added slightly to the week's gains as tensions continued to escalate between North Korea and the United States.
Traders took heart in a measure of U.S. consumer prices that increased only slightly in July, pointing to benign inflation that could make the Federal Reserve cautious about raising interest rates again this year.
Hope that the Fed will have to slow its rate hike path appeared to stop, at least for now, the near $1-trillion loss in world stocks valuations this week triggered by the war of words between Pyongyang and the United States.
"The data confirms the Fed will have a wait-and-see attitude," said King Lip, chief investment officer at Baker Avenue Asset Management in San Francisco. Reuters data show a 28-percent chance for a hike after the Fed's December meeting.
Japanese markets were closed for a holiday but the tense mood dragged Asian shares lower and an MSCI index of stocks across the globe was on track to post its largest weekly drop since the week before Donald Trump won the U.S. presidential election in November.
Trump issued a new tweet-warning to Pyongyang on Friday: "Military solutions are now fully in place, locked and loaded, should North Korea act unwisely."
North Korea had responded to Trump's previous promise to unleash "fire and fury" with a threat to land a missile near the U.S. Pacific territory of Guam.
Baker Avenue's Lip said the U.S. market was higher due to "bargain hunters," but "there's more room for the market to come down.
"There is a low probability that we will have a war with North Korea," he said, and a larger pullback in stocks is "a buyable drop."
The Dow Jones Industrial Average rose 44.33 points, or 0.2 percent, to 21,888.34, the S&P 500 gained 6.01 points, or 0.25 percent, to 2,444.22 and the Nasdaq Composite added 32.10 points, or 0.52 percent, to 6,248.97.
The pan-European FTSEurofirst 300 index lost 1.06 percent and MSCI's gauge of stocks across the globe shed 0.17 percent.
Emerging market stocks lost 1.28 percent. MSCI's broadest index of Asia-Pacific shares outside Japan closed 1.48 percent lower.
South Korea's KOSPI fell 1.7 percent to its lowest since May 24, but its losses for the week are a relatively modest 3.2 percent.
"Pretty remarkable, perhaps even extraordinary, considering," said Tim Ash, strategist at fund manager BlueBay.
A Reuters Datastream index of more than 7,000 stocks across the globe saw its market capitalization drop from a record high $61.36 trillion on Monday to $60.43 trillion at the close on Thursday.
Many world stock markets have hit record or multi-year highs in recent weeks, leaving them vulnerable to a selloff, and the tensions over North Korea have proved to be the trigger.
But the yen added to an already-strong weekly rally of close to 1.5 percent, hitting its highest in almost four months versus the dollar at 108.73 yen.
The yen tends to benefit during times of geopolitical or financial stress as Japan is the world's biggest creditor nation and there is an assumption that Japanese investors there will repatriate funds should a crisis materialize.
The Korean won also continued to fall, down 0.45 percent to 1,147.2.
The dollar was further weighed Friday by the soft U.S. inflation data.
"If the data continues to come in on the softer side, the market might start to price the Fed staying on hold this year," said Sireen Harajli, FX strategist at Mizuho in New York.
The dollar index fell 0.3 percent, with the euro up 0.36 percent to $1.1812.
Sterling was last trading at $1.3009, up 0.27 percent on the day.
The Japanese yen last strengthened 0.16 percent versus the greenback at 109.09 per dollar
In bond markets, the yield in U.S. Treasuries fell, also pressured by the lowered expectations for a Fed move.
"There are four more (inflation) prints between now and the December FOMC meeting and we expect the Fed to remain data-dependent, if a touch more cautious," said TD Securities in a research note.
Benchmark 10-year notes last rose 5/32 in price to yield 2.194 percent, from 2.211 percent late on Thursday.
The 30-year bond last /32 in price to yield 2.7933 percent, from 2.794 percent late on Thursday.
After touching a more than two-month high, spot gold last added 0.1 percent to $1,287.18 an ounce. U.S. gold futures gained 0.26 percent to $1,293.50 an ounce.
Ongoing global glut concerns lingered in oil markets despite a bigger-than-expected draw in U.S. crude inventories.
U.S. crude fell 0.41 percent to $48.39 per barrel and Brent was last at $51.68, down 0.42 percent on the day.
Additional reporting by Gertrude Chavez-Dreyfuss and Saqib Iqbal Ahmed in New York, Sruthi Shankar and Tanya Agrawal in Bangalore and Dmitry Zhdannikov in London