* Brent crude slides, then swings higher

* Bank of England leaves rates on hold, as expected

* US stocks end higher, led by Nasdaq

(Updates with closing U.S. market levels)

By Caroline Valetkevitch

NEW YORK, June 18 (Reuters) - Major stock indexes climbed on

Thursday as semiconductor shares jumped, while Brent oil touched

its lowest level in weeks before finishing slightly higher.

An interim deal between the United States and Iran to end

the Middle East war took effect, and oil tankers sailed through

the Strait of Hormuz, pointing to a resumption of long

restricted energy flows.

U.S. Vice President JD Vance, however, warned Israel against

further attacks on Iran-backed Hezbollah in Lebanon, raising

doubts about the durability of the U.S.-Iran ceasefire

agreement.

Brent crude futures gained 30 cents, or 0.38%, to

settle at $79.85 a barrel after sliding as low as $76.54 earlier

in the session. U.S. West Texas Intermediate fell 19

cents or 0.25% to finish at $76.60 a barrel.

Europe is more vulnerable to an increase in inflation from

higher oil prices than the United States.

The U.S. dollar index hit a one-year high after a hawkish

tilt by the Federal Reserve on Wednesday raised bets on rate

increases this year.

The Nasdaq gained 1.9% and led gains on Wall Street, while

the Philadelphia semiconductor index rose 6.4%.

U.S. President Donald Trump said iPhone maker Apple ( AAPL )

had agreed to work with Intel ( INTC ) to design and manufacture

its chips in the U.S.. Intel ( INTC ) shares jumped 10.6%.

Peter Cardillo, chief market economist at Spartan Capital

Securities in New York, noted the rebound in stocks from a day

earlier.

"The reason for the optimism was Trump and the president of

Iran signed the memorandum and oil prices fell," he said,

adding: "There is enthusiasm that after 60 days a more solid

deal will come to fruition and, by that time, hopefully the low

supply factor in the oil market will be reversed."

DOLLAR FIRM

The Dow Jones Industrial Average rose 72.15 points,

or 0.14%, to 51,564.70, the S&P 500 rose 80.48 points, or

1.08%, to 7,500.58 and the Nasdaq Composite rose 496.28

points, or 1.91%, to 26,517.93.

With the market closed on Friday for the Juneteenth holiday

marking the emancipation of enslaved Black Americans, the S&P

500 showed a 0.93% weekly gain compared with the Nasdaq's 2.43%

advance and the Dow's 0.71% increase.

MSCI's gauge of stocks across the globe rose

6.48 points, or 0.58%, to 1,127.60.

The pan-European STOXX 600 index fell 0.34%.

In foreign exchange, the dollar index, which measures

the greenback against a basket of currencies including the yen,

euro and sterling, rose 0.45% to 100.80, the highest level since

May 2025. It surged 0.85% the previous session, its biggest

single-day jump in over three months.

The U.S. central bank on Wednesday held rates steady in a

3.50% to 3.75% range as Kevin Warsh took charge with a sweeping

policy review. The Fed funds futures market is pricing in 68%

odds of a rate hike by September, LSEG data shows.

The Japanese yen weakened as far as 161.45 per

dollar, its lowest since July 2024, wiping out gains made after

Tokyo's intervention on April 30. A break above the currency

pair's 2024 high of 161.99 would send the yen to its weakest

level since 1986.

Sterling fell 0.62% to $1.3206 after the Bank of

England left interest rates unchanged.

U.S. Treasury yields fell after rising the day before. The

two-year yield, the most sensitive to Fed rate-change

expectations, was down 1 basis point on Thursday at 4.153%,

after rising as high as 4.207% on Wednesday. The 10-year yield

was down 3 basis points at 4.437%.

U.S. gold futures fell 3.1% to settle at $4,245.9.