The Globe and Mail reports in its Tuesday edition that stocks rose on Monday as prospects of the U.S. Federal Reserve cutting interest rates as early as July offset uncertainty about escalating turmoil in the Middle East. A Reuters dispatch to The Globe says that all three major U.S. stock indexes closed sharply higher. Canada's main stock index also rose, although gains were held back somewhat by a drop in oil prices. "The rally is a bit surprising," said Jay Hatfield at InfraCap in New York. "The market action is extremely bullish because this is the time frame in June when we're supposed to have a pullback. People do not want to sell in this market." Financial markets are pricing in at least two 25-basis-point rate cuts by the Fed before year-end. The first cut is widely expected to happen in September. Israel continued to bombard Iran the day after the U.S. joined the war. Still, oil prices tumbled after Iran's retaliation did not include action to disrupt oil tanker traffic through the Strait of Hormuz. The S&P/TSX Composite Index ended up 111.79 points at 26,609.36, stopping just short of the record closing high it posted June 12. The price of U.S. crude settled 7.2 per cent lower at $68.51 (U.S.) a barrel.