Wall Street stocks clawed their way back from a steep selloff to close higher Monday, notching a final-hour rebound after U.S. President Donald Trump suggested that the U.S.-Israeli war on Iran could be close to ending.

All three indexes staged a late comeback after Trump said the war's time frame was "very far" ahead of estimates. Early in the session, oil prices reached their highest levels since mid-2022 due to constricted supply arising from shipping disruptions as the war on Iran entered its tenth day. Ballooning energy prices could metastasize into a broader inflation spike at a time when many U.S. consumers are struggling with affordability.

The stock market's intraday swings as investors digest headlines have added volatility to the trading day in recent weeks.

"There is still an awful lot of uncertainty out there regarding the duration of the conflict, as well as the duration of the closure of the Strait of Hormuz," said Sam Stovall, chief investment strategist of CFRA Research in New York.

"Again today, seeing such a relative reversal in price movements indicates that investors are looking for any opportunity to jump back into the equity markets."

Those mounting worries, combined with Friday's weaker-than-expected employment report, raise the possibility of economic stagflation, which would trap the U.S. Federal Reserve between the two sides of its dual mandate — price stability and full employment.

Still, financial markets largely expect the central bank to keep its key interest rate unchanged through the first half of the year, according to CME's FedWatch tool.

"That weak employment report along with rising energy prices ... speaks to potential stagflation," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.

"The Federal Reserve is going to be stuck between a rock and a hard place." Hopes of de-escalation of the widening Middle Eastern conflict dimmed after Iran selected Mojtaba Khamenei to succeed his father as supreme leader, a choice U.S. President Donald Trump, who has called for Iran's unconditional surrender, deemed unacceptable.

Homebuilders and banks suffered some of the steepest losses.

According to preliminary data, the S&P 500 gained 56.22 points, or 0.83%, to end at 6,796.24 points, while the Nasdaq Composite gained 309.13 points, or 1.38%, to 22,696.81. The Dow Jones Industrial Average rose 240.91 points, or 0.51%, to 47,742.46.

The Philadelphia Semiconductor Index was a clear outperformer, with chipmakers SanDisk, Broadcom and Nvidia posting solid gains.

On the economic front, later this week, the Labor Department's Consumer Price Index, the Commerce Department's second take on fourth-quarter GDP and its broad Personal Consumption Expenditures report all have the potential to move markets.