* US and Iran preliminary deal to end war lifts investor

optimism

* Dow, STOXX hits record closing highs

* US dollar eases

* Markets pare risk of interest-rate hikes globally

(Updates with closing US market levels)

By Caroline Valetkevitch and Marc Jones

NEW YORK/LONDON, June 15 (Reuters) - Major stock indexes and

bond prices rallied while oil futures settled at a three-month

low on Monday as U.S. President Donald Trump said a preliminary

agreement to end the war in the Gulf has already been signed by

the U.S. and Iran.

The Dow hit a record-high close along with the STOXX 600, with

the deal expected to ease inflationary pressures globally and

lessen the need for higher interest rates.

Details have yet to be made public. But the agreement is

expected to reopen the blockaded Strait of Hormuz and extend a

ceasefire for 60 days, allowing negotiators to tackle difficult

issues like the future of Iran's nuclear program.

"The market is responding to the peace deal," said Peter

Cardillo, chief market economist at Spartan Capital Securities

in New York.

"While it doesn't really accomplish the real motive for the

war - that is to rein in the prospects of Iran having the

capabilities of a nuclear bomb - it is welcoming to know the

Strait of Hormuz will be opening up," he said. "This news is

likely to make a good case for a summer (stocks) rally that can

broaden out."

Investors said it could be a relief for central banks meeting

this week, reducing pressure to tighten policy against an

energy-driven rise in inflationary expectations.

Markets had already priced in a likely deal, but the

confirmation was enough to send oil prices tumbling more than $4

a barrel.Brent crude futures fell $4.16, or 4.76%, to

settle at $83.17, while U.S. West Texas Intermediate

dropped $4.13, or 4.87%, to $80.75.

SpaceX's shares rose 19.6% after the Elon Musk-led firm

ended its blockbuster IPO with a more than $2 trillion valuation

on Friday. Markets were relieved by the smooth trading during

its landmark Nasdaq launch, setting a new template for companies

and exchanges bracing for the highly anticipated OpenAI and

Anthropic IPOs expected later this year.

Shares of United Airlines rose 3.8%, and Delta,

American Airlines ( AAL ), Norwegian Cruise and

Carnival also gained.

Technology stocks rallied. An index of semiconductor stocks

was up 5.4%.

The Dow Jones Industrial Average rose 468.77 points, or

0.92%, to 51,671.03, the S&P 500 rose 122.83 points, or

1.65%, to 7,554.29 and the Nasdaq Composite rose 795.10

points, or 3.07%, to 26,683.94.

MSCI's gauge of stocks across the globe rose

18.97 points, or 1.71%, to 1,131.28.

The pan-European STOXX 600 index gained 0.19%.

RELIEF FOR CENTRAL BANKS

Central banks of the U.S., Britain, Japan, Australia,

Switzerland, Sweden, Norway and Russiaare set to hold policy

meetings this week, with Japan considered likely to lift rates

this time.

The Federal Reserve is widely expected to leave rates at 3.50%

to 3.75% on Wednesday at Chair Kevin Warsh's debut meeting. The

statement, economic projections and news conference will be

scrutinized for any signs of the Fed dropping its easing bias as

officials grow more hawkish on inflation risks.

U.S. Treasury prices rallied - pushing yields lower - on hopes

that oil prices would now fall sustainably and lessen the upside

risks for inflation.

The yield on 10-year Treasury notes fell to 4.4197%,

the lowest since May 12, and was last down 1.4 basis points at

4.471%.

Earlier, the two-year German yield, sensitive to

European Central Bank interest rate expectations, fell 4 basis

points to a two-week low of 2.57%.

The U.S. dollar hit a 10-day low against the euro and sterling.

The dollar index, which measures the greenback against a

basket of currencies including the yen and the euro, was last

down 0.20% at 99.60, with the euro up 0.25% at $1.1597.

It earlier reached $1.1622, its highest since June 5.

Sterling strengthened 0.1% to $1.342. The dollar was

nearly flat against the Japanese yen, which is stuck in a

bear trend even though the Bank of Japan is expected to raise

rates by 25 basis points to 1% on Tuesday.

The Bank of England is expected to hold rates at 3.75% on

Thursday and through 2026.

Gold prices rose for a third straight session. Spot gold

was up 2.06% at $4,305.84 an ounce.