Wall Street stocks rose amid hopes that the conflict between Israel and Iran would not escalate, and markets began to await the Federal Reserve's decision later in the week, AFP reported.

Iranian state television was temporarily taken off the air after an Israeli strike, following a series of Iranian missiles that killed 11 people in Israel on the fourth day of the escalating air war.

However, US stocks spent the entire session in positive territory as oil prices retreated in the absence of a direct hit to oil infrastructure, which analysts took as a sign that worse scenarios had not materialized.

The Dow Jones Industrial Average closed up 0.8% at 42,515.09 points.

The broad-based S&P 500 rose 0.9% to 6,033.11, while the tech-heavy Nasdaq Composite Index jumped 1.5% to 19,701.21.

"The main force today is simply the feeling that the conflict between Israel and Iran has been relatively contained so far," said Briefing.com analyst Patrick O'Hare.

After decades of hostility and a long-running covert war, Israel launched a surprise air campaign against targets in Iran, saying the goal was to prevent its arch-enemy from acquiring a nuclear weapon — a charge Tehran denies.

As the conflict continues, there have been no direct strikes on the Straits of Hormuz, a key shipping route, according to analysts.

"The situation has not deteriorated beyond the bombings and is not spreading to other countries or other markets, such as shipping," said Jack Ablin of Cresset Capital Management.

Most of the 11 sectors of the S&P 500 posted gains.

Semiconductor stocks were among the strongest sectors, with AMD gaining 8.7%, Nvidia 1.9% and Micron Technology 3.7%.

United States Steel jumped 5.1% in early trading after President Donald Trump signed an executive order approving a "partnership"

between the Pittsburgh-based company and Nippon Steel, which apparently paves the way for a deal, partially revised from the Japanese firm's initial plan to acquire the old American company.

In addition to the conflict in the Middle East, markets are watching the Federal Reserve's decision and other economic news from the US, including May retail sales. |BGNES