* Yen firms after joint intervention

* Trump calls joint currency operation a sign of friendship

* Stocks rise, oil prices drop after recent headlines on

Iran war

(Updates to midday)

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 against

the euro and dollar after the U.S. and Japan confirmed joint

intervention to support it.

Oil prices fell sharply after U.S. President Donald Trump held

off on a fresh attack on Iran in the hope of sealing a quick

deal that could boost oil supplies from the Gulf. U.S. crude

was last down 6.07% at $79.53 a barrel and Brent

was off at $83.64 per barrel, down 4.88% on the day.

However, Iran said on Monday there were no talks under way with

the U.S. and no plans for any meetings.

Optimism over earnings helped to underpin equities. 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.

"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 for equities, "so far most of the earnings have beat

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

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

time on Monday, helped by a sharp rally following strong

earnings and signs that the AI boom is driving fresh demand for

its cloud-computing services.

The Dow Jones Industrial Average rose 512.69 points, or

0.98%, to 52,998.45, the S&P 500 rose 96.74 points, or

1.29%, to 7,586.46 and the Nasdaq Composite rose 512.28

points, or 2.02%, to 25,886.13.

MSCI's gauge of stocks across the globe rose

8.86 points, or 0.79%, to 1,129.37. The pan-European STOXX 600

index rose 0.45%.

AstraZeneca ( AZN ) investors punished the pharmaceutical firm

on Monday 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.

Japan's Nikkei closed 1% lower, while South Korea's

KOSPI slid more than 5%.

Japan and the U.S. conducted coordinated yen-buying intervention

and will not hesitate to take further action, Japan's finance

ministry said on Monday, confirming a rare bilateral action to

halt the yen's slide to fresh 40-year lows.

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 dollar index, which measures the greenback against a

basket of currencies including the yen and the euro,

rose 0.24% to 99.95, with the euro down 0.18% at $1.1506.

Against the Japanese yen, the dollar weakened 0.44% to

156.87.

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 dropped

5.52 basis points to 4.69%. It reached 4.747% on Friday, the

highest since January 2025.

The 30-year bond yield fell 4.44 basis points to

5.2306% after peaking at 5.2811% on Friday, the highest since

2007.