New Delhi, April 15 -- U.S. stocks rallied Monday and recovered the last of their losses caused so far by the U.S.-Iran war, as Wall Street remains hopeful that the global economy can still avoid a worst-case scenario.

The S&P 500 rose 1% and is back to where it was before the United States and Israel attacked Iran in late February, just 1.3% below its all-time high set early this year. The Dow Jones Industrial Average added 301 points, or 0.6%, and the Nasdaq composite climbed 1.2%.

Even in the oil market, where prices jumped above $100 per barrel after ceasefire talks over the weekend failed to end the war, prices pared their leaps as Monday progressed. The moves for financial markets overall were much more modest than the extreme swi...