WASHINGTON - Wall Street stocks shrugged off early weakness and pushed higher on Monday as oil price gains moderated amid optimism that the United States and Iran would strike a peace agreement.
Some analysts cited President Donald Trump's claim that Iranian representatives phoned him and expressed keen desire for a deal after weekend talks in Pakistan failed to yield an agreement.
Oil prices, which had surged back above $100 a barrel as the United States imposed a blockade on Iran's imports, later eased. Both major contracts ended higher but below $100 a barrel.
"The market is betting that Trump will get some sort of a deal," said Peter Cardillo of Spartan Capital Securities.
Trump warned Monday that any Iranian attack boats that approach the American naval blockade around Iran's ports would be destroyed, despite international calls for a ceasefire to be respected.
But markets also took in the US president's White House comments that Iranian representatives had called to make a deal since the Islamabad talks failed.
"I can tell you that we've been called by the other side. They'd like to make a deal. Very badly, very badly," he told reporters outside the Oval Office, without identifying which officials had called.
US indices picked up momentum after Trump's remark near midday, with the broad-based S&P 500 finishing up 1.0 percent.
The advance in stocks suggests "that the market remains confident that a potential end to the conflict could be imminent and that it will spur a sharp upward move across equities," said Briefing.com.
But the heightened risk of inflation and a global slowdown is expected to dominate this week's annual spring meetings of the International Monetary Fund and the World Bank in Washington.
On Friday, the US government reported that consumer-level inflation climbed to 3.3 percent in March, the highest since May last year.
"The stagflation word is being widely aired once again as geopolitical turmoil threatens to stymie international growth and stoke inflationary pressures," said Russ Mould, investment director at AJ Bell.
Asian and European markets ended the day mostly lower.