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Indexes up: Dow 0.23%, S&P 500 0.48%, Nasdaq 0.56%

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Tesla up on robotaxi launch in Texas

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US business activity moderates; price pressures building

up

(Updates after markets open)

By Kanchana Chakravarty and Nikhil Sharma

June 23 (Reuters) -

U.S. stock indexes rallied on Monday as investors looked

past worries of potential crude supply disruptions after the

United States' strikes on nuclear facilities in Iran, while

Tesla surged after the EV-maker launched robotaxis.

Tesla's shares rose 9.5% after it

deployed

a small group of self-driving taxis picking up paying

passengers on Sunday in Austin, Texas.

Meanwhile, oil prices dipped more than 1% to

$76.2 per barrel, having touched a six-month high earlier, as

oil and gas transit continued on tankers from the Middle East

after U.S. airstrikes against Iran over the weekend.

Iran has repeatedly threatened to retaliate against the U.S.

attacks, but is yet to do so in a meaningful way.

Equity markets have been pressured in recent days as the

Israel-Iran attacks raised concerns about a wider conflict in

the Middle East, disrupting oil prices and raising concerns

about a resurgence in inflationary pressures.

The benchmark S&P 500 index remains about 2.3%

below its record level.

"I think the market is certainly in a holding pattern,

waiting to see the level of Iran's response to the U.S. weekend

attacks," said Ross Mayfield, investment strategist at Baird.

"There's a sense that investors are conditioned not to

think that geopolitical conflicts in the Middle East will have a

long-term impact on the market."

U.S. business activity slowed marginally in June, while

prices increased further amid President Donald Trump's tariffs,

indicating that inflation might rise in the second half of 2025.

However, Federal Reserve Vice Chair for Supervision

Michelle Bowman, recently tapped by Trump as the central bank's

top bank overseer,

said

the time to cut interest rates could be fast approaching

and that she is growing more worried about risks to the job

market, and less concerned tariffs will cause an inflation

problem.

At 10:42 a.m. ET the Dow Jones Industrial Average

rose 95.63 points, or 0.23%, to 42,302.45, the S&P 500

gained 28.89 points, or 0.48%, to 5,996.73, and the Nasdaq

Composite gained 109.12 points, or 0.56%, to 19,556.61.

The focus will be on U.S. core PCE data and final GDP

reading this week, as well as Fed Chair Jerome Powell's two-day

semiannual testimony before Congress.

The central bank held interest rates steady in its June

monetary policy meeting, but flagged inflationary risks due to

higher trade duties.

In earnings, investors awaited fourth-quarter results from

sportswear company Nike ( NKE ) and parcel delivery firm FedEx ( FDX )

, both expected later in the week.

Among other movers, drugmaker Eli Lilly ( LLY ) rose 1.3%.

Its rival Novo Nordisk fell 5.4% after detailed trial

data on its experimental obesity drug CagriSema failed to

impress investors.

Fiserv's ( FI ) shares rose nearly 2% after the fintech

firm announced plans to launch a new digital asset platform.

Northern Trust ( NTRS ) surged 8.6% after a Wall Street

Journal report said Bank of New York Mellon ( BK ) approached

the asset and wealth manager for a potential merger.

On the flip side, AI-server-maker Super Micro Computer ( SMCI )

dropped 4.6% after it

announced

private offering of $2 billion five-year convertible bonds.

Advancing issues outnumbered decliners by a 1.98-to-1

ratio on the NYSE and by a 1.32-to-1 ratio on the Nasdaq.

The S&P 500 posted seven new 52-week highs and three new

lows, while the Nasdaq Composite recorded 52 new highs and 71

new lows.