* Indexes: Dow up 0.18%, S&P 500 off 0.02%, Nasdaq down

0.47%

* Jefferies gains on report Japan's SMFG plans possible

takeover

* Barclays raises year-end target for S&P 500 to 7,650

from 7,400

* Ares Management ( ARES ), Apollo Global limit redemptions at

funds

(Updates to prices in late afternoon)

By Sinéad Carew and Purvi Agarwal

March 24 (Reuters) - Wall Street's main indexes were

volatile on Tuesday as oil prices and U.S. Treasury yields rose,

while investors reacted to the latest reports on the Middle East

conflict a day after the market had a relief rally following the

U.S. postponement of strikes on Iranian power plants.

Bond yields extended gains after a weak auction of 2-year

Treasury notes, adding pressure to equity markets, where Nasdaq

composite was leading losses and the Dow Industrials lost steam

but then turned higher again.

Stocks also added to losses after reports the Pentagon is

expected to send thousands of troops from the elite 82nd

Airborne Division to the Middle East. A Reuters report, citing

two people familiar with the matter, said this would add to the

massive military buildup there even as the Trump administration

has said it seeks talks with Iran.

But indexes regained lost ground after Trump told reporters that

the United States was talking to "the right people" in Iran in

order to reach an agreement to end hostilities and that Iran has

agreed they will never have nuclear weapons.

Wall Street indexes had marked their biggest one-day gain since

February 6 on Monday as oil prices fell after Trump had

postponed the strikes and announced talks with Iran even as

Tehran denied negotiations with the U.S., disputing Trump's

comment on "productive talks". But on Tuesday, U.S. crude oil

rose more than 5%.

"It's sort of this double whammy that we've been in for the

market where higher oil prices and higher rates are both putting

downward pressure on equities. That's a pretty sort of

stagflationary backdrop, which, needless to say, is not a

positive backdrop for the stock market," said Kevin Gordon, head

of macro research & strategy at the Schwab Center for Financial

Research in New York.

And reports of more troops headed to the Middle East could

suggest that "the war is escalating and will extend further,"

Gordon said.

"By virtue of that you've a longer lead time for oil flow and

production to come back online. That means that oil prices stay

higher for longer and you get a more sustained shock to the

global economy. It's worse for Europe and Asia, but, the U.S. is

not immune to it completely," he said.

At 02:42 p.m. the Dow Jones Industrial Average rose 82.60

points, or 0.18%, to 46,291.07, the S&P 500 lost 1.33

points, or 0.02%, to 6,579.67 and the Nasdaq Composite

lost 102.29 points, or 0.47%, to 21,844.47.

Among the 11 S&P 500 major industry sectors, energy led

gains with a 2.2% advance while the biggest losses were in

communication services, down 1.9% and technology

, which was off 0.4%.

Meanwhile, private credit concerns resurfaced after a report

that Ares Management ( ARES ) limited redemptions at 5% at its

private credit fund, along with Apollo Global Management ( APO )

, as withdrawal requests surged. Both stocks were down

about 1%. Peers Blackstone and Carlyle were off 2%

and 0.8% respectively.

Earlier a survey showed U.S. business activity slowed to an

11-month low in March as the Middle East war raised prices for

energy products and other inputs.

Higher oil prices have revived inflation jitters and complicated

the interest rate outlook for central banks. The U.S. Federal

Reserve struck a hawkish tone last week, projecting only one

reduction in 2026.

Traders are no longer pricing in any rate cuts this year,

compared with two reductions expected before the Middle East

conflict erupted. Expectations for hikes nudged higher amid

escalating tensions last week, but were quickly unwound after

Trump's comments on Monday, according to CME's FedWatch Tool.

Among individual movers, shares of Jefferies gained 3%

after the Financial Times reported that Japan's Sumitomo Mitsui

Financial Group ( SMFG ) is working on plans for a possible

takeover of the investment bank.

Cosmetics maker Estee Lauder ( EL ) fell 10% after it said it

was in talks for a potential merger with Spanish beauty group

Puig Brands.

Barclays lifted its 2026 year-end target for the S&P 500 index

to 7,650 from 7,400, citing stronger earnings

expectations that outweigh macro risks like Middle East

tensions, AI-driven disruption and stress in private credit.

Declining issues outnumbered advancers by a 1-to-1 ratio on

the NYSE where there were 139 new highs and 167 new lows. On the

Nasdaq, 2,019 stocks rose and 2,632 fell as declining issues

outnumbered advancers by a 1.3-to-1 ratio. The S&P 500 posted 20

new 52-week highs and 18 new lows.