(Adds close of European markets)

* Oil prices ease further after Bessent comments

* Central bank meetings eyed for inflation views

* US stocks higher, led by AI-related companies

By Chuck Mikolajczak

NEW YORK, March 16 (Reuters) - Global stocks rallied on

Monday as oil prices pulled back, though a previous surge in

crude prices is likely to sway the inflation outlook and cause

most central banks to hold rates steady at their policy meetings

this week.

Israel said it has detailed plans for at least three more weeks

of war as its military pounded sites across Iran overnight,

while Iranian drone attacks temporarily shut Dubai airport and

hit a key oil facility in the United Arab Emirates.

U.S. President Donald Trump repeated his call for help to

unblock the Strait of Hormuz after some vessels sailed through

it. In addition, Treasury Secretary Scott Bessent said the U.S.

was "fine" with some Iranian, Indian and Chinese ships going

through the strait for now, adding that any action to alleviate

higher prices would depend on how long the war on Iran lasts.

U.S. crude fell 5.13% to $93.65 a barrel and Brent

fell to $100.28 per barrel, down 2.77% on the day. Both

Brent and U.S. crude have surged nearly 40% in March.

This jump in oil prices and its potential to boost inflation

have led markets to recalibrate expectations for easing policies

from global central banks this year. Markets are currently

pricing in about 25 basis points of cuts from the U.S. Federal

Reserve by the end of the year, and nearly 40 basis points of

hikes from the European Central Bank, according to LSEG data.

On Wall Street, U.S. stocks were higher, led by AI-linked

names such as Nvidia ( NVDA ) and Meta Platforms ( META ).

Meta shares were up 1.8% after Reuters reported the social media

giant plans to lay off 20% or more of its workforce while Nvidia ( NVDA )

gained 2.8% as CEO Jensen Huang began to detail the company's

hardware and software plans at its annual developer conference.

"Nice to see tech bounce back here, it really is the whole

guessing on the de-escalation of Iran and the energy concerns,"

said Tim Ghriskey, senior portfolio strategist at Ingalls &

Snyder in New York.

"Certainly in the near term it's the energy concerns and

then longer-term it's what are you going to do about this very

large country that's a big part of the Middle East?"

The Dow Jones Industrial Average rose 342.00 points,

or 0.73%, to 46,900.47, the S&P 500 climbed 65.24 points,

or 0.98%, to 6,697.43 and the Nasdaq Composite jumped

273.44 points, or 1.24%, to 22,378.46. Each of the three indexes

was on pace for its biggest daily percentage gain since February

6.

MSCI's gauge of stocks across the globe advanced

10.97 points, or 1.10%, to 1,010.13, and was also on course for

its biggest daily percentage gain since February 6. The

pan-European STOXX 600 index closed up 0.44% to snap a

three-session streak of declines.

Commerzbank's shares shot up about 9% after Italy's

UniCredit launched a bid for an additional stake in

the German lender.

ALL THE CENTRAL BANKS

Central banks in the U.S., Britain, euro zone, Japan,

Australia, Canada, Switzerland and Sweden will this week hold

their first meetings since the start of the Iran war, and

investors will look for clues on how rising crude prices could

impact the interest-rate path.

The sharp shifts in central bank expectations have led to

large moves in government bonds.

The yield on the benchmark U.S. 10-year notes

dropped 6.1 basis points to 4.224%, though it is still up about

26 bps for March, as market participants dialed back the timing

and magnitude for expected rate cuts.

The U.S. Fed is largely expected to hold rates steady at its

policy announcement on Wednesday, and policymakers are more

likely to strike a cautious if not outright hawkish tone this

week due to the current oil shock.

There have been sharper moves in rate-sensitive,

shorter-dated yields, and two-year German yields have

jumped 40 basis points this month, while the equivalent British

gilt yield has surged 58 bps.

A cautiously steady outcome is expected from the other central

bank meetings, excluding the Reserve Bank of Australia, which is

seen likely to raise its cash rate a quarter point to 4.1%, as

it battles resurgent inflation at home.

The heightened volatility in markets has tended to benefit

the U.S. dollar as a safe haven. The United States is also a net

energy exporter, giving it a relative advantage over Europe and

much of Asia, which are net importers.

But the dollar index, which measures the greenback

against a basket of currencies, dropped 0.66% to 99.67, after

touching a 10-month high on Friday, with the euro up

0.93% at $1.1522.