Updates at 1125 GMT

By Harry Robertson and Stella Qiu

LONDON/SYDNEY, June 25 (Reuters) -European stocks fell on Tuesday after a 7% drop in chipmaker Nvidia on Monday soured the mood, but U.S. equity futures pointed higher after falling the previous day.

Stock market indices remained close to record highs as investors shifted into less flashy names. Government bond yields cooled and Japan's yen stayed under pressure.

Investors' attention is being pulled in multiple directions, with snap elections in France starting at the weekend; the first U.S. Presidential debate on Thursday; and the release of the Federal Reserve's preferred gauge of inflation on Friday.

Yet the focus has been on a 16% selloff in Nvidia shares NVDA.O over the last three days, after the chipmaker rocketed higher to briefly become the world's biggest company last week.

Europe's benchmark STOXX 600 index .STOXX slipped 0.3%, with the STOXX tech index .SX8P down 0.4% after falling 1.5% in early trading.

Germany's DAX stock index .GDAXI was 1% lower while Britain's FTSE 100 .FTSE was down 0.2%. A weak earnings update from aeroplane-maker Airbus AIR.PA also weighed on European shares.

The Nasdaq 100 .NDX fell 1.1% on Monday but the Dow Jones .DJI rose 0.7% as investors shifted into companies that are seen as better value in sectors like energy and utilities.

"To put things in context, (Nvidia) shares have still gained 190% on a 12-month view, so it's no surprise some investors are locking in some profits," said Derren Nathan, equity researcher at broker Hargreaves Lansdown.

Futures for the U.S. S&P 500 and Nasdaq ESc1, NQcv1 were up 0.2% and 0.4% respectively on Tuesday.

Equity indices remain very close to record highs in the United States and Europe, despite the recent dip, thanks to excitement over the potentially transformative power of AI and hopes that interest rates will soon be falling.

Nathan said the rotation into other sectors was "a vote of confidence by investors in the health of the broader economy".

Bond markets were steady on Tuesday as traders waited for the next catalyst in the form of the U.S. personal consumption expenditures (PCE) inflation report on Friday.

The Fed's favoured measure, PCE inflation is expected to have ticked down to 2.6% year-on-year in May from 2.7% in April.

The yield on the all-important 10-year U.S. Treasury US10YT=RR was last down 2 basis points at 4.226%. Yields move inversely to prices.

It fell the same amount on Monday, helped by San Francisco Fed President Mary Daly saying the central bank must "exhibit care" and that rising unemployment is a risk along with inflation.

Elsewhere, the yen JPY=EBS was keeping traders alert for any signs of further intervention from Japanese authorities to prop up the currency as it traded just above a two-month low of around 160 to the dollar.

It hit a record low against the euro EURJPY=R of 171.49 on Monday as pressure on the currency mounted thanks to interest rates in Japan that remain far lower than in the United States and Europe.

"Comments from key Japanese officials at the start of this week have understandably made market participants more wary of the risk of another bout of direct intervention," said Lee Hardman, currency analyst at Japanese bank MUFG.

The dollar index USD=, which measures the currency against six major peers, was slightly higher at 105.59.

Oil prices were lower on Tuesday, with Brent LCOc1 futures down 0.5% at $85.48 a barrel after rising to $86.23 overnight, around the highest since the start of May.

Japan's Nikkei 225 stock index .N225 climbed 0.95% overnight while China's CSI 300 .CSI300 fell 0.54%.

Reporting by Harry Robertson in London and Stella Qiu in Sydney; Editing by Christian Schmollinger, Ros Russell and Emelia Sithole-Matarise

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