04:44 PM EDT, 06/16/2025 (MT Newswires) -- US equities rebounded Monday following Friday's selloffs as investors shook off worries about a further escalation in the Middle East conflict, with the focus shifting to this week's Federal Reserve policy meeting.

The Nasdaq Composite rose 1.5% to 19,701.2, while the S&P 500 climbed 0.9% to 6,033.1. The Dow Jones Industrial Average ended up 0.8% at 42,515.1. Communication services and technology led gainers among sectors, while utilities saw the biggest drop.

Israel launched airstrikes across Iran late last week, targeting its military infrastructure and nuclear facilities, with Tehran firing missiles at Tel Aviv in response.

Iran doesn't want to "expand the circle of war" with Israel, but it will respond "in proportion" to any attack, CNN reported Monday, citing Iranian President Masoud Pezeshkian.

Iran has signaled through Arab intermediaries that it would be open to resuming negotiations over its nuclear programs as long as the US doesn't join Israel in the attacks, The Wall Street Journal reported.

Separately, Reuters reported, citing sources, that Iran has asked certain Gulf countries, including Saudi Arabia, to push US President Donald Trump about pressuring Israel into an immediate ceasefire.

RBC Capital Markets, in a note emailed Monday, pointed to a surge in expectations for a US-Iran nuclear deal.

US Treasury yields were higher, with the 10-year rate rising five basis points to 4.46% and the two-year rate increasing 1.9 basis points to 3.98%.

The US central bank's Federal Open Market Committee is scheduled to kick off its two-day monetary policy meeting Tuesday. Markets widely expect the FOMC to again hold interest rates steady Wednesday, according to the CME FedWatch tool.

"In his press conference, (Fed Chair Jerome Powell) is likely to stress that the committee is in no rush to cut rates further and will proceed patiently and carefully," Macquarie said in a Monday client note. "He is also likely to emphasize that should there be a substantial deterioration in the labor market, that the Fed is prepared to act."

West Texas Intermediate crude oil was down 2.3% at $71.28 a barrel in Monday's late-afternoon trade.

The Organization of the Petroleum Exporting Countries trimmed its global oil demand projections for 2025, while it maintained its world and US economic growth forecasts for this year and the next.

"Early indicators suggest a rebound in the US economy following the trade-related disruptions and import surge driven by front-loading ahead of tariff implementation, which weighed on (first-quarter) growth," the OPEC said. "The expected normalization of trade patterns amid ongoing negotiations is likely to support growth in (the second quarter)."

In economic news, New York manufacturing contraction worsened in June amid weakness in new orders and shipments, though firms turned positive regarding the outlook of business conditions, a survey by the New York Fed showed.

In company news, Advanced Micro Devices ( AMD ) shares jumped 8.8%, the second-top gainer on the S&P 500, as Piper Sandler raised its price target on the stock to $140 from $125.

Eaton (ETN) agreed to acquire UK-based Ultra PCS for $1.55 billion from Cobham Ultra Group to expand its aerospace portfolio. Eaton shares rose 4.4%.

Victoria's Secret (VSCO) shareholder Barington Capital Group on Monday urged the clothing and beauty retailer to revamp its board and terminate a shareholder rights plan so that the company "can get back on the right course." The company, however, said it is confident about executing its strategy under its "new and experienced" leadership. The stock rose 2.4%.

Gold was down 1.4% at $3,403.5 per troy ounce, while silver rose 0.1% to $36.38 per ounce.