NEW YORK (CNN/Money) - U.S. stocks were set to soar at the open Monday on the shoulders of a global surge into equities and a rally in the greenback following news that U.S. forces have moved into Baghdad.

Stock futures were sharply higher, gaining more than 3 percent, suggesting that the Dow Jones industrial average could open up as much as 230 points as investors showed relief that the war may be drawing to a close soon.

"The market is going to go higher. The first hour should see very heavy volume with elation over the progress that's been made with regard to Baghdad," Steve Previs, a U.S. share trader at Jefferies International in London told Reuters

European shares surged, the dollar rose and investors pulled money out of safe-haven bonds, oil and gold, to focus on equities.

Following several days of raids on the capital, U.S. forces occupied several key locations, including two presidential palaces. The advance was difficult, with reports of many casualties, but the Americans say they're dominating the fight. In addition, British military officials have confirmed that Iraqi Gen. Ali Hassan al-Majeed, known as "Chemical Ali" for his 1988 gas attacks against Kurds, has been found dead in Basra. (Click here for CNN.com's coverage of the war in Iraq).

"The general feeling is that the endgame is close," Rob Hayward, senior foreign exchange strategist at ABN Amro told Reuters.

The progress of the U.S.-U.K. coalition in ousting Saddam Hussein from power has given markets a lift in the past week. The Dow Jones industrial average was up 1.6 percent over the five days, including a 37-point advance Friday. The Nasdaq composite index gained 1 percent even after a 13-point tumble to close out the week.

European markets soared at midday, with the pan-European benchmark FTSE Eurotop 300 rallying 4.27 percent, or about 20 percent above its mid-March six-year closing low. The broader Dow Jones Euro STOXX 50 index gained 5.2 percent.

Airlines, tourism and luxury goods were among the leading sectors in European trade, along with other shares that had been heavily sold ahead of and in the early stages of war.

However, European traders cautioned that an early surge might not be extendable through the close, a danger also in existence for U.S. markets, once they open. Dealers said after the opening surge, investors were now waiting for extended buying and whether markets can close strongly by avoiding any heavy profit-taking.

Earlier, Asian stocks had also rallied on the war news, with Tokyo's Nikkei index closing up 2.2 percent.

With stocks on the rise, Treasury prices tumbled in early trade, sending the 10-year note yield up to 4.03 percent from 3.95 percent late Friday.

The dollar gained 1.5 percent against the euro and was also up three-quarters of a point versus the yen. The dollar bought 1.0572 and ¥120.84.

Oil prices tumbled around four percent in London. U.S. light crude futures for May delivery fell $1.47 a barrel to $27.15, while Brent crude was down $1.25 a barrel to $23.75. The price of oil has slumped around 30 percent over the past month.

Spot gold fell more than $6 an ounce in London, trading at $319.65, down from $326 Friday.

Among U.S. stocks trading in Europe, Alcoa (AA: Research, Estimates) was up nearly 8 percent. The nation's No. 1 aluminum maker late Friday posted a better-than-expected first-quarter operating profit but said the business environment remains challenging.  

-- Reuters contributed to this report.