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WALL STREET EQUITIES RALLY AS OIL PRICES FALL

Wall Street's three major indexes rose almost 1% on Monday after a choppy trading session as investors looked past the latest Middle East military strikes while they hoped for Federal Reserve cuts to interest rates.

With the U.S. joining Israel in its war against Iran during the weekend, investors had primarily been worried that the conflict would push up energy costs sharply.

But equities gained strong support in afternoon trading as oil prices tumbled. Oil futures settled down more than 7% after Iran retaliated against the U.S. by attacking its military base in Qatar and took no action to disrupt oil and gas tanker traffic through the Strait of Hormuz.

Oil's decline sent the S&P 500 energy sector .SPNY down 2.5%, making it the sole loser among the benchmark's 11 major sectors. The strongest sector was consumer discretionary .SPLRCD, which added 1.75%, with Tesla TSLA.O, up 8.2%, leading the way after the electric-vehicle maker started testing its long-awaited robotaxi service, a key step toward proving the technology that CEO Elon Musk has for years touted as a crucial driver of the company's lofty valuation.

Earlier on Monday, Fed Vice Chair Michelle Bowman said "it is time to consider adjusting the policy rate," as job market risks outweighed tariff-related inflationary concerns. And Fed Bank of Chicago president Austan Goolsbee said tariffs have had a more modest economic impact than expected, at least so far.

After rising earlier in the day the CBOE volatility index .VIX fell 0.79 points to close below 20 for its second time since Israel first attacked Iran on June 13.

Here is your closing snapshot:

(Sinéad Carew)

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EARLIER LIVE MARKETS POSTS

FED'S 'INFLATION TOLERANCE' KEY; POWELL TO TESTIFY THIS WEEK CLICK HERE

DEFENSE STOCKS RISE; ATTACKS ON IRAN, U.S. BUDGET IN FOCUS CLICK HERE

COOLING DAYS: FLASH PMI, EXISTING HOME SALES CLICK HERE

INDEXES CLIMB EARLY; FED'S BOWMAN OPEN TO CUTTING RATES CLICK HERE

STRAIT OF HORMUZ IN CROSSHAIRS: WHAT'S AT STAKE FOR GLOBAL ENERGY - CLICK HEREUS FUTURES EDGE HIGHER WITH INVESTORS EYING IRAN CLICK HERE

APRIL'S DOLLAR SELLOFF A LOT TO DO WITH HEDGING, BIS SAYS CLICK HERE

BRITAIN'S STOCK MARKET ATTRACTIVE FOR INCOME-FOCUSED INVESTORS CLICK HERE

ALL EYES ON NATO SUMMIT FOR DEFENCE STOCKS CLICK HERE

STOXX AT SIX-WEEK LOWS CLICK HERE

EUROPE BEFORE THE BELL: A BIT LOWER, BUT NOT MUCH CLICK HERE

MORNING BID: NOW THE BALL IS IN IRAN'S COURT CLICK HERE