US STOCKS-Equities end higher as oil prices pull back on truce hopes

• Oil retreats after previous week's surge
• U.S. Steel up as Trump approves $14.9 bln Nippon Steel bid
• Fed expected to keep interest rates unchanged this week
• Indexes up: Dow 0.75%, S&P 500 0.94%, Nasdaq 1.52%

NEW YORK, June 16 (Reuters) - U.S. stocks closed higher on Monday, as oil prices retreated after the Israel-Iran attacks left crude production and exports unaffected, easing investor concerns about the potential for higher energy prices to stoke inflation.

Crude prices LCOc1, CLc1 settled down more than 1% on hopes a truce was on the horizon between Israel and Iran after days of missile strikes, as Iran called on U.S. President Donald Trump to force a ceasefire in the four-day-old aerial war, while Israel's prime minister said his country was on the "path to victory."

Oil prices had surged more than 7% on Friday after Israel began bombing Iran.

Tehran has asked Qatar, Saudi Arabia and Oman to press Trump to use his influence with Israel to agree to an immediate ceasefire, in return for Iran's flexibility in nuclear negotiations, sources told Reuters.

"The wild card is really what's going to happen to oil prices ... any little geopolitical move can have pretty big impacts on that sector and in this economy also," said George Young, portfolio manager with Villere & Co in New Orleans.

"The cases that the consumer pulls in their horns and their nerves about inflation and don't spend, well, that's going to have a direct impact on earnings, it doesn't matter which sector of the economy you've invested in."

The Dow Jones Industrial Average .DJI rose 317.30 points, or 0.75%, to 42,515.09, the S&P 500 .SPX gained 56.14 points, or 0.94%, to 6,033.11 and the Nasdaq Composite .IXIC gained 294.39 points, or 1.52%, to 19,701.21.

The Nasdaq registered its biggest daily percentage gain since May 27.

Investors are also awaiting the U.S. Federal Reserve's monetary policy decision on Wednesday, when policymakers are widely expected to keep interest rates unchanged.

Money markets are largely not expecting the Fed to cut rates until September, pricing in a 61.1% chance for a cut of at least 25 basis points, according to LSEG data.

"Interest rates are still higher and so that one is a bit tough to fathom because perhaps markets are still anticipating some inflation," said Jack Ablin, chief investment officer of Cresset Capital in Chicago.

"If nothing else, just the heightened uncertainty, combined with the tariffs is probably keeping the Fed sidelined."

Economic data expected this week includes monthly retail sales, import prices and weekly jobless claims.

Tech .SPLRCT and communication services .SPLRCL led S&P sector gains while utilities .SPLRCU was the worst performer.

The Philadelphia SE Semiconductor index .SOX jumped 3.03%, led by an 8.81% surge in Advanced Micro Devices AMD.O after Piper Sandler raised its price target on the chipmaker.

UPS UPS.N and FedEx FDX.N gained 1.1% each after the Trump Organization launched a self-branded mobile network, dubbed Trump Mobile, and named the companies as shipping partners.

Shares of Sarepta Therapeutics SRPT.O plummeted 42.1% after the company disclosed a second case of a patient dying due to acute liver failure after receiving its gene therapy for a rare form of muscular dystrophy.

U.S. Steel X.N rose 5.1% after Trump approved Nippon Steel's 5401.T $14.9 billion bid for the company.

Advancing issues outnumbered decliners by a 1.97-to-1 ratio on the NYSE and by a 1.9-to-1 ratio on the Nasdaq.

The S&P 500 posted 16 new 52-week highs and five new lows, while the Nasdaq Composite recorded 74 new highs and 96 new lows.

Volume on U.S. exchanges was 17.86 billion shares, compared with the 18.14 billion average for the full session over the last 20 trading days.