By Caroline Valetkevitch

NEW YORK (Reuters) - The second half of the year started with gains in global stock indexes on Friday ahead of the long U.S. holiday weekend, while the 10-year Treasury yield fell the most since COVID-19 hit markets in March 2020.

Copper prices slumped to their weakest in 17 months.

Stocks were lower early in the New York session but rallied late to end higher. U.S. markets will be closed Monday for the U.S. Fourth of July holiday.

"It's a Friday before a long weekend, so market movements can be somewhat exaggerated," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

Cardillo said he expects stock market performance to improve overall in the second half of the year.

"We're going to see more green days in the second half than we'll see red," Cardillo said.

The U.S. benchmark S&P 500, which closed out its worst first-half since 1970 on Thursday, climbed 1.1%. MSCI's world stocks index, which on Thursday notched its biggest percentage decline for the first half of the year since its 1990 creation, rose 0.4%.

The Dow Jones Industrial Average rose 321.83 points, or 1.05%, to 31,097.26, the S&P 500 gained 39.95 points, or 1.06%, to 3,825.33 and the Nasdaq Composite added 99.11 points, or 0.9%, to 11,127.85.

The pan-European STOXX 600 index lost 0.02% and MSCI's gauge of stocks across the globe gained 0.39%.

In Treasuries, yields tumbled as investors priced in the likelihood the Federal Reserve will force inflation down to near its target rate.

The yield on 10-year notes tumbled 23.3 basis points from the open to the session's lowest point, before paring the decline, to end down 8.5 basis points at 2.889%.

The two-year yield, which typically moves in step with interest rate expectations, slid 8.8 basis points to 2.839%. Both the two-year and 10-year yields were at roughly four-week lows.

Data on Friday showed manufacturing production in the euro zone fell for the first time last month since the initial wave of the coronavirus pandemic in 2020, while inflation numbers hit another record high.

In the United States, manufacturing activity slowed more than expected in June, with a measure of new orders contracting for the first time in two years, more evidence the economy was cooling amid aggressive monetary policy tightening by the Federal Reserve.

Copper prices dropped as investors worried about a possible recession hitting demand for metals.

Three-month copper on the London Metal Exchange had eased 2.6% to $8,047 a tonne after dropping to its lowest since early February 2021 at $7,955.