Sawt Falasteen - Peace deal hopes boost Wall Street stocks despite latest US strikes

The gains came despite a jump in Brent oil prices after US military strikes on Iran prompted worries about a military rebuttal from Tehran.

"Risk-on winds are dominating Wall Street today as progress on the US-Iran negotiations raises optimism concerning a sustained retreat in crude oil and yields," said Jose Torres of Interactive Brokers.

"A potential peace deal, which is offsetting the adverse impact of some overnight tensions between both nation's militaries, would materially strengthen business fundamentals and the economic outlook."

While the Dow edged down from last week's records, both the S&P 500 and Nasdaq finished at new all-time highs.

One big mover was chip company Micron, which piled on nearly 20 percent following a favorable analyst report from UBS that extolled the company's connection to the artificial intelligence boom. Micron's surge Tuesday made it the latest tech giant worth more than $1 trillion.

While Wall Street was closed on Monday, stock markets had rallied elsewhere and crude futures dropped below $100 a barrel after reports that an Iran deal might come within days.

That was before US forces said they had attacked missile sites in southern Iran and boats trying to lay mines.

Iranian state media reported overnight blasts in the southern port city of Bandar Abbas, near the Strait of Hormuz, and the country's Revolutionary Guards said its forces had downed a US drone entering its airspace and had fired at an F-35 fighter jet.

"The US terrorist army, continuing its illegal and unjustified actions since the ceasefire ... has, in the past 48 hours, committed a gross violation of the ceasefire in the Hormozgan region," the Iranian foreign ministry said.

Despite the strikes, Secretary of State Marco Rubio said on Tuesday that a deal remained within reach.

But he remained firm on the Strait of Hormuz, the key oil and gas shipping route which Iran is seeking to control

Brent North Sea crude, the international benchmark, jumped almost 4.5 percent Tuesday to edge back above $100 a barrel before pulling back a bit.

In Europe, Frankfurt and Paris closed off around one percent with London ending just 0.2 percent ahead as traders returned after a long holiday weekend in Britain.

British oil giant BP topped the losers' chart, off more than four percent after it unexpectedly removed Albert Manifold as chairman only months into his tenure, citing "serious concerns" about governance standards, oversight and conduct at the company.

AJ Bell investment director Russ Mould focused on the Iran situation as he noted that "continued doubts about the potential for a deal and an overnight pre-emptive US strike on Iran mean any euphoria is being kept in check."

In Asia, Seoul's stock market hit a new record high above 8,000 points as chipmakers, carmakers and shipbuilders continued to outperform.

In Europe, investors were quick to express disappointment at Ferrari's unveiling of its first electric model, with shares in the Italian luxury carmaker skidding six percent.

- Key figures at around 2015

Brent North Sea Crude: UP 3.6 percent at $99.58 a barrel

New York - DOW: DOWN 0.2 percent at 50,461.68 (close)

New York - S&P 500: UP 0.6 percent at 7,519.12 (close)

New York - Nasdaq: UP 1.2 percent at 26,656.18 (close)

London - FTSE 100: UP 0.2 percent at 10,491.39 (close)

Paris - CAC 40: DOWN 1.0 percent at 8,173.11 (close)

Frankfurt - DAX: DOWN 0.8 percent at 25,184.89 (close)

Hong Kong - Hang Seng Index: FLAT at 25,599.45 (close)

Tokyo - Nikkei 225: DOWN 0.3 percent at 64,996.09 points (close)

Shanghai - Composite: DOWN 0.2 percent at 4,145.37 (close)

Euro/dollar: DOWN at 1.1635 from 1.1644 on Monday

Pound/dollar: DOWN at 1.3449 from $1.3504

Dollar/yen: UP at 159.30 from 158.91 yen

Euro/pound: UP at 86.49 from 86.22 pence

burs-jmb/des

N.Awad--SF-PST