* Yen firms after US, Japan confirm joint intervention

* Stocks rise, oil prices drop after recent headlines on

Iran war

* Dow registers record closing high

(Updates with U.S. market closing levels)

By Caroline Valetkevitch and Nell Mackenzie

NEW YORK/LONDON, Aug 3 (Reuters) - Oil prices dropped and

major stock indexes gained on Monday on signs that U.S.-Iran

tensions were easing again, while the yen strengthened after the

U.S. and Japan confirmed joint intervention to support the

currency and investors watched for signs of further

intervention.

U.S. President Donald Trump over the weekend held off on a fresh

attack on Iran.

Trump said on Monday that talks with Iran were under way,

warning that it was a "last chance" for Tehran to sign a good

deal to end the five-month-old war, but Iran denied that any

negotiations were being held or planned.

Front-month Brent futures fell $6.35, or 7.0%, to settle

at $83.77 a barrel, while U.S. West Texas Intermediate (WTI)

crude fell $4.33, or 5.1%, to settle at $80.34.

The Dow registered a record closing high, with optimism

over earnings also helping to underpin equities.

"The sharp drop in oil prices, due to Trump's cancelling

severe attacks against Iran and hopes of a diplomatic

resolution, set the ball rolling this morning," said Peter

Cardillo, chief market economist at Spartan Capital Securities

in New York.

Also a plus, "so far most of the earnings have beat

expectations," and guidance has been upbeat, he said. More than

300 of the S&P 500 component companies have reported earnings so

far, with roughly 85% of firms beating expectations, according

to LSEG data.

Amazon's ( AMZN ) market value topped $3 trillion for the first

time on Monday, helped by a sharp rally following its recent

strong earnings and signs that the AI boom is driving fresh

demand for its cloud-computing services. Amazon ( AMZN ) shares ended

4.6% higher on the day.

The Dow Jones Industrial Average rose 693.38 points, or

1.32%, to 53,178.41, the S&P 500 rose 110.78 points, or

1.48%, to 7,600.50 and the Nasdaq Composite rose 540.04

points, or 2.13%, to 25,913.90.

MSCI's gauge of stocks across the globe rose

10.50 points, or 0.94%, to 1,131.01. The pan-European STOXX 600

index gained 0.45%.

AstraZeneca ( AZN ) investors punished the pharmaceutical firm

over reports of merger talks with U.S. rival Bristol Myers

Squibb ( BMY ) that could make it one of the world's biggest

drugmakers with a combined value of nearly $400 billion.

Investors were watching for further yen intervention after

Japan's finance ministry said on Monday that Japan and the U.S.

conducted coordinated yen-buying intervention and will not

hesitate to take further action. The intervention on Friday

underscored both countries' resolve to prevent a selloff in the

yen and Japanese government bonds from causing global

spillovers.

Trump said on Sunday that the U.S. was helping Japan prop up the

yen as a sign of friendship and to help the world economy.

The Japanese currency strengthened to its strongest level

against the dollar in about three months.

The dollar index, which measures the greenback against a

basket of currencies including the yen and the euro,

rose 0.26% to 99.97, with the euro down 0.17% at $1.1507.

Tokyo's solo intervention conducted between late April and

early May caused only a brief yen rebound, while a rate hike in

June by the Bank of Japan provided little support, underscoring

the challenge policymakers face of rising oil prices and a wide

interest-rate differential against other major economies.

Elsewhere, U.S. Treasury yields retreated as oil prices fell,

even as traders continued to weigh the odds of a Federal Reserve

rate hike should the war drag on.

The yield on benchmark U.S. 10-year notes fell 6.13

basis points to 4.684%. It reached 4.747% on Friday, the highest

since January 2025.

The 30-year bond yield fell 4.76 basis points to

5.2274% after peaking at 5.2811% on Friday, the highest since

2007.

Spot gold rose 0.33% to $4,054.44 an ounce.