* Indexes up: Dow 0.9%, S&P 500 0.6%, Nasdaq 0.6%

* Airlines and cruise operators climb; energy stocks fall

* Fed decision due on Wednesday

* Investors await earnings from 'Mag 7' companies

* Baker Hughes ( BKR ) gains on Q2 profit beat

(Updates after markets open)

By Johann M Cherian and Ragini Mathur

July 27 (Reuters) - Wall Street's main indexes rose on

Monday after the United States and Iran paused hostilities,

boosting risk appetite ahead of a week of major earnings,

economic data and an interest rate decision.

A wide swathe of stocks sensitive to energy prices gained.

United Airlines and Delta Air Lines ( DAL ) advanced

3.3% and 2.2%, respectively. Cruise operators Royal Caribbean

and Carnival climbed 1.9% and 3.6%,

respectively.

A 6.7% slide in Brent crude prices to $90.37 a

barrel weighed on shares of energy companies. Occidental

Petroleum ( OXY ) and Exxon Mobil were down about 2%

each.

Markets ended last week rattled by escalating Middle East

tensions, on worries that the conflict could fuel further price

pressures ahead of the Fed's monetary policy decision due on

Wednesday.

Despite the announcement of the pause in attacks over the

weekend, shipping through the Strait of Hormuz remained low,

with Iran still controlling the critical waterway.

The Fed, meanwhile, has offered few clues on monetary policy

outlook since Kevin Warsh took over as chair. Investors expect

rates to be left unchanged this week, but are pricing in at

least 25 basis points ofincrease later this year, LSEG-compiled

data showed.

"The Fed is not going to move this week. It would be

difficult to justify a hike based on a short-term spike in oil

prices," said Thomas Hayes, chairman at Great Hill Capital.

The Personal Consumption Expenditures Price Index for June

is due a day after the central bank's decision. The Fed's

preferred inflation gauge will likely be key in shaping market

expectations for interest rates later this year.

At 9:57 a.m. ET, the Dow Jones Industrial Average

rose 489.98 points, or 0.94%, to 52,437.23, the S&P 500

gained 40.53 points, or 0.55%, to 7,452.51 and the Nasdaq

Composite advanced 144.57 points, or 0.59%, to

25,120.40.

Interest-rate-sensitive Russell 2000 small-cap index

climbed 1.5%, while the CBOE Volatility Index dipped 0.75

points to 17.85.

Communication services led the gains on the S&P

500, with a 2.2% rise, as Alphabet rose 3%. The

Fertilizers & Agricultural Chemicals index fell

1.7%, with CF Industries ( CF ) and Dow down about 3.2%

each.

Earnings from "Magnificent Seven" companies Microsoft ( MSFT )

, Amazon.com ( AMZN ), Meta and Apple ( AAPL )

will test the AI trade further this week. All these mega-cap

stocks were up about 1% each.

Negative cash-flow reports from Alphabet and Tesla

last week added to concerns about debt-fueled corporate

spending.

Volatile chip stocks have been mixed recently, with industry

leader Nvidia ( NVDA ) dropping about 2%. Chinese chipmaker CXMT

Corp's stellar debut signaled intensifying

competition for the U.S. semiconductor industry.

The tech-heavy Nasdaq is down about 7% from its

record high, while earlier this month the Philadelphia SE

Semiconductor Index confirmed it has been in "bear

market" territory since late June.

An index closing 10% below its most recent high is called a

technical correction, while a 20% drop is referred to as a bear

market.

Among other movers, U.S. oilfield services company Baker

Hughes ( BKR ) rose 8.6% after reporting a

stronger-than-expected second-quarter profiton Sunday.

Advancing issues outnumbered decliners by a 3.18-to-1 ratio

on the NYSE and by a 3.43-to-1 ratio on the Nasdaq.

The S&P 500 posted 21 new 52-week highs and two new lows

while the Nasdaq Composite recorded 69 new highs and 68 new

lows.

(Reporting by Johann M Cherian and Ragini Mathur in Bengaluru;

Editing by Saumyadeb Chakrabarty and Joyjeet Das)