US stocks have climbed, with the S&P 500 and the Nasdaq hitting record highs after President Donald Trump's comments eased fears of an all-out Middle East conflict.
Trump's comments at a White House briefing on Wednesday followed Iran's missile strikes overnight on military bases housing US troops in Iraq.
The US president said the strikes had not harmed any Americans and Tehran appeared to be standing down.
Comments earlier from Iran's foreign minister that the country did not seek an escalation and a tweet from Trump that "All is well!" also helped to calm jitters.
Stocks were edging higher before Trump's comments but he confirmed the view the United States was "willing to make peace with anyone who wants to," said Michael O'Rourke at JonesTrading in Connecticut.
"His tone was very conciliatory, so I think everyone views this as a de-escalation and the S&P pushed to new all-time highs."
Global markets have been rattled by concerns about rising tensions in the Middle East after the US killing of Iranian general Qassem Soleimani on January 3.
The S&P 500 energy index was trading more than 1 per cent lower, while the rest of the S&P sectors were trading higher.
The Dow Jones Industrial Average rose 261.69 points, or 0.92 per cent, to 28,845.37, the S&P 500 gained 27.81 points, or 0.86 per cent, to 3,264.99 and the Nasdaq Composite 93.65 points, or 1.03 per cent, to 9,162.23.
Among the day's decliners, Boeing fell 1.1 per cent after a 737-800 jet made by the company and belonging to a Ukrainian airline burst into flames shortly after takeoff from Tehran, killing all 176 people aboard.
Also, Walgreens Boots Alliance Inc slid 5.7 per cent as its quarterly profit missed expectations.
Meanwhile, Lennar Corp gained 1.8 per cent after the No. 2 US homebuilder beat quarterly profit estimates on lower home prices and mortgage rates.
Adding to the upbeat mood, the ADP National Employment Report showed private payrolls jumped 202,000 jobs last month, much above the 160,000 rise expected.
Advancing issues outnumbered declining ones on the NYSE by a 1.77-to-1 ratio; on Nasdaq, a 1.82-to-1 ratio favored advancers.
The S&P 500 posted 58 new 52-week highs and no new lows; the Nasdaq Composite recorded 106 new highs and nine new lows.