Wall Street's main indexes gained in choppy trading on Monday after logging sharp declines in the previous session, as investors took heart from President Donald Trump's comments on U.S.-Iran talks even as the Middle East conflict widened.
Trump said the U.S. was in serious discussions with a "more reasonable regime" to end the war, but repeated his warning to open the Strait of Hormuz or risk U.S attacks on Iranian oil wells and power plants.
The comments came after Yemen's Iran-backed Houthi militia entered the war over the weekend, escalating the conflict.
The S&P 500 Energy Index (.SPNY) added 1.5% with Exxon Mobil (XOM.N) and Chevron (CVX.N) up 3% and 1.5%, respectively.
"The S&P 500 is still down less than 10% (since the war began). In many ways, investors have been affected less by the implications of the Strait of Hormuz being closed than I would have thought," said Sam Stovall, chief investment strategist at CFRA Research.
"Today's action is probably more of a technical bounce because many sectors and sub-industries are in oversold condition."
The financial index (.SPSY) gained 0.8% after the U.S. Department of Labor issued long-awaited guidelines intended to clarify how trustees can add alternative assets ranging from private equity to cryptocurrencies to 401(k) retirement plans.
Shares of asset managers climbed with Blackstone (BX.N) up 1.7%, KKR (KKR.N) up 1.4% and Apollo Global Management (APO.N) gaining 1%.
Nine out of the S&P 500's 11 major industry sectors were in the green.
Since the war began, the blue-chip Dow, the Nasdaq and the small-cap Russell 2000 (.RUT) have all confirmed correction territory.
Wall Street brokerage Morgan Stanley downgraded global equities to "equal weight" from "overweight", but said fund flows to U.S. equities and bonds had overtaken the rest of the world since the conflict began, indicating it might re-emerge as a safe haven for investors.
At 09:47 a.m. ET, the Dow Jones Industrial Average (.DJI) rose 216.19 points, or 0.48%, to 45,382.83, the S&P 500 (.SPX) gained 20.46 points, or 0.32%, to 6,389.31 and the Nasdaq Composite (.IXIC) gained 39.52 points, or 0.19%, to 20,987.88.
Investors will closely monitor comments from Fed Chair Jerome Powell and New York Fed President John Williams, scheduled to speak later in the day.
A slew of labor market data, including the nonfarm payrolls figures for March, is scheduled for release this week and expected to provide more insight into the health of the economy.
The spike in oil prices resulting from the Iran conflict has revived inflation fears, prompting money market participants to price out any easing from the Federal Reserve this year, compared with two cuts expected before the war began, per the CME Group's FedWatch Tool.
Among other movers, Sysco's (SYY.N) shares dropped 12% after the food distributor said it would buy catering supplier Jetro Restaurant Depot in a $29 billion deal, including debt.
Shares of aluminum producers climbed as prices of the metal were trading at around four-year peaks. Alcoa (AA.N) and Century Aluminum (CENX.O) gained 12% and 13.6%, respectively.
U.S. markets will be closed on Friday for the Good Friday holiday.
Advancing issues outnumbered decliners by a 2.69-to-1 ratio on the NYSE and by a 1.49-to-1 ratio on the Nasdaq.
The S&P 500 posted 19 new 52-week highs and 4 new lows while the Nasdaq Composite recorded 17 new highs and 121 new lows.
