WASHINGTON (dpa-AFX) - Stocks moved sharply higher in early trading on Monday and saw even further upside as the day progressed. The major averages all showed significant advances, extending the strong upward move seen over the two previous sessions.
The major averages ended the day not far off their highs of the session. The Nasdaq surged 540.04 points or 2.1 percent to 25,913.90, the S&P 500 shot up 110.78 points or 1.5 percent to 7,600.50 and the Dow jumped 693.38 points or 1.3 percent to 53,178.41.
The rally on Wall Street came as crude oil prices have plummeted amid renewed optimism about an end to the conflict in the Middle East.
U.S. crude oil futures are plunging by more than 5 percent after President Donald Trump said in a post on Truth Social that he had canceled a planned attack on Iran.
'We have just been asked by Iran, and other Middle Eastern Countries, to hold off any attack in that the perimeters of a deal has been agreed to,' Trump said. 'This would include the Immediate, Complete, and Total OPENING OF THE HORMUZ STRAIT, and an end to Iran's nuclear threat.'
He added, 'Based on this request, I have agreed, for the future benefit of the WORLD and, likewise, the survival of a successful and prosperous Iran, to cancel the attack, subject to being able to rapidly make a DEAL.'
Trump later claimed that talks between the U.S. and Iran would begin Monday afternoon, although Tehran has denied there are plans for direct negotiations with the U.S.
Airline stocks saw substantial strength amid the nosedive by crude oil prices, with the NYSE Arca Airline Index soaring by 4.9 percent.
Significant strength was also visible among software stocks, as reflected by the 4.1 percent spike by the Dow Jones U.S. Software Index. The index jumped to a two-month closing high.
Retail stocks also extended the rally seen last Friday, driving the Dow Jones U.S. Retail Index up by 2.6 percent to its highest closing level in almost three months.
Housing, gold and telecom stocks also saw considerable strength, while pharmaceutical stocks bucked the uptrend, dragging the NYSE Arca Pharmaceutical Index down by 1.8 percent.
In U.S. economic news, the Institute for Supply Management released a report showing its reading on U.S. manufacturing activity increased by more than expected in the month of July.
The ISM said its manufacturing PMI climbed to 55.6 in July from 53.3 in June, with a reading above 50 indicating growth in the sector. Economists had expected the index to rise to 54.0.
With the much bigger-than-expected increase, the index reached its highest level since hitting 55.9 in May 2022.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index slid by 0.9 percent, while Hong Kong's Hang Seng Index climbed by 0.5 percent.
Meanwhile, European stocks moved mostly higher on the day. The German DAX Index jumped by 1.5 percent and the French CAC 40 Index shot up by 1.2 percent, although the U.K.'s FTSE 100 Index bucked the uptrend and edge down by 0.1 percent.
In the bond market, treasuries showed a strong move back to the upside after moving sharply lower over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, slumped 5.9 basis points to 4.686 percent.
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