NEW YORK, Aug 4 — Oil prices slumped and stocks mostly rose yesterday after US President Donald Trump insisted negotiations with Iran were ongoing despite Tehran's denials.

Crude futures slid more than four per cent as markets brushed aside Iran's denials while Trump described the two sides as talking and Iran facing "a last chance before decapitation."

The pullback in oil prices translated into a buoyant session in Wall Street, with all three major US indices in positive territory the entire day.

The Dow rose 1.3 per cent to an all-time high, while the other two major indices were also firmly higher.

"The geopolitical developments and the drop in oil prices is really providing some fuel for stocks to run towards a new high," said Angelo Kourkafas of Edward Jones, who also cited strong corporate earnings as supportive of stocks.

Most large US tech companies advanced, with Amazon reaching a US$3 trillion (RM12.3 trillion) valuation for the first time.

While tech stocks were still under pressure in Asia on concerns of over-investment, European bourses cheered the pullback in oil prices.

Paris and Frankfurt both closed up more than one per cent, with both hitting record highs.

But London slipped after the share price of one of its biggest constituents, pharmaceutical group AstraZeneca, slumped nine per cent on a report that it could merge with US rival Bristol Myers Squibb.

Oil companies, which figure prominently in London's indices, followed oil prices lower.

Earlier in the day in Asia, technology companies again saw heavy losses as traders worried about whether massive investments in artificial intelligence will deliver long-lasting profits.

Chipmakers SK hynix and Samsung dragged down South Korea's Kospi index after a rally on Friday.

The yen meanwhile gained against the dollar after US and Japanese authorities confirmed Monday that they had bought Japan's currency on the open markets after months of weakness.

The yen was recently near its weakest point against the dollar level since 1986, hit by higher US interest rates, rising oil prices and capital outflows from Japan. On Monday afternoon, the dollar was trading at around 157 yen compared to above 163 yen last week.

The dollar was mixed against other major currencies.

Beyond the geopolitical risks, attention is also on the prospects for the US economy after the Federal Reserve held interest rates steady last week despite calls from some of its policymakers to raise rates to fight inflation.

"The focus as we move through the week will be the US non-farm payrolls report, which will be another test of the resilience of the US labor market," said Kathleen Brooks, research director at the trading platform XTB.

This week's calendar includes monthly US jobs data for July as well as earnings from Disney, McDonald's and SpaceX.

Despite falling yesterday, oil prices remain well above levels seen before the United States and Israel attacked Iran, sparking a war that has sharply curtailed Gulf exports of oil and gas and other key products.

Iran, for its part, said it is not currently negotiating with the United States.

"Our negotiations are with Oman to secure passage through the Strait of Hormuz," the critical oil corridor, foreign ministry spokesman Esmaeil Baqaei said. — AFP