Stocks open higher on Wall Street and crude oil prices drop 5% as Mideast tensions cool

NEW YORK (AP) — Stocks rose on Wall Street Monday and oil prices fell after the U.S. and Iran paused their attacks while work resumed on restarting negotiations to end the war.

The S&P 500 rose 0.6%. The index is coming off two weekly losses in a row. The Dow Jones Industrial Average rose 518 points, or 1%, as of 9:55 a.m. Eastern time. The Nasdaq composite rose 0.7%.

Oil prices reversed course from a week ago, when a sharp escalation in fighting between the U.S. and Iran worsened worries about global oil supplies. The price of Brent crude, the international standard, dropped 5.4% to $86.74 a barrel for October delivery. Prices surged to over $100 a barrel last week before easing.

The war between the U.S. and Iran has sharply curtailed, and at a times halted, traffic through the vital Strait of Hormuz. That has had a ripple effect throughout the world’s economy. Gasoline prices have surged and shipping costs for most goods are rising, with businesses typically passing those costs along to households.

Markets rose in Europe after closing higher in Asia.

Bond yields also fell, relieving pressure from stocks. The yield on the 10-year Treasury fell to 4.65% from 4.69% late Friday.

Wall Street got boost from influential technology companies in the U.S. after Chinese memory chipmaker CXMT soared in its debut in Shanghai. The company jumped to become China’s most valuable listed company with an estimated market capitalization of 3.3 trillion yuan (nearly $490 billion).

Microsoft jumped 2.6% and Google's parent, Alphabet, rose 2.8%. They, and several other tech companies, are among the most valuable in the world. Their big market values give them more influence over the direction of the broader market.

Wall Street has a busy week ahead with several potential mark-moving reports. The U.S. government will release an update on consumer confidence on Tuesday and inflation on Thursday.

The big focus will be on the Federal Reserve, which will give an update Wednesday on its interest rate policy.

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AP Business Writer Elaine Kurtenbach contributed to this report.