U.S. stocks rose sharply on Tuesday, bringing the S&P 500 close to an all-time high as optimism grew over possible renewed talks between the United States and Iran.

The Dow Jones Industrial Average also gained, while the Nasdaq Composite climbed as investors reacted to hopes that the conflict could be contained.

Oil prices eased as markets anticipated that successful diplomacy could prevent prolonged disruptions to global energy supplies and inflation.

Global markets also rallied on expectations that corporate earnings growth will remain strong if geopolitical risks ease, the AP has reported.

Investors shifted focus back toward company profits after weeks of concern over war-driven economic instability.