Wall Street Ends Higher as Middle East Peace Hopes Ease Market Jitters

Wall Street’s three major indexes closed modestly higher on Thursday after a volatile session, as oil prices reversed earlier gains amid signs of progress in U.S.-Iran peace negotiations. Markets initially traded lower before recovering in the afternoon, while crude prices slipped as diplomatic discussions continued despite unresolved tensions over Iran’s uranium stockpile and control of the Strait of Hormuz — a critical global oil shipping route.

U.S. Secretary of State Marco Rubio said there were “encouraging signs” in negotiations with Iran, though he warned that any attempt by Tehran to impose tolls in the Strait of Hormuz would make a deal difficult. Meanwhile, an Iranian official told Reuters that while no agreement had been finalized, discussions had narrowed differences on key issues including uranium enrichment and control of the strait.

The DJI climbed 276.31 points, or 0.55%, to close at a record 50,285.66. The SPX added 12.75 points, or 0.17%, to 7,445.72, while the IXIC edged up 22.74 points, or 0.09%, to 26,293.10.

Investors also digested a fresh round of corporate earnings. Shares of Walmart dropped 7.3% after the retail giant projected second-quarter profits below expectations while maintaining its full-year outlook. CFO John David Rainey noted that consumers continue to feel pressure from elevated fuel costs, warning that sustained high costs could lead to increased retail inflation later this year.

The consumer staples sector led market declines, falling 1.6%, weighed down by Walmart and weakness in other retailers including Casey's General Stores and Costco Wholesale.

Meanwhile, shares of Nvidia slipped 1.8% as investors locked in profits following the company’s strong quarterly forecast and announcement of an $80 billion share buyback program. Despite the decline, the Philadelphia Semiconductor Index gained 1.3%, with investors viewing Nvidia’s outlook as broadly positive for the chip sector, including competitors such as Intel and Advanced Micro Devices.

Economic data also supported sentiment. Weekly jobless claims declined, signaling continued resilience in the labor market and giving the Federal Reserve more flexibility to maintain focus on inflation. U.S. manufacturing activity also climbed to a four-year high in May as companies increased inventories amid concerns over supply disruptions and rising costs linked to the Iran conflict.

In the tech sector, IBM surged 12.4% after reports that the Trump administration would back several quantum computing firms, including a new IBM venture, in exchange for equity stakes. Other quantum-related stocks rallied sharply, including GlobalFoundries, D-Wave Quantum, and Rigetti Computing.

On the downside, Intuit plunged 20% after lowering its annual revenue forecast for TurboTax and announcing plans to cut 17% of its workforce. Shares of H&R Block also declined nearly 5%.

Market breadth remained positive overall, with advancing stocks outpacing decliners on both the NYSE and Nasdaq. Trading volume across U.S. exchanges totaled 17.67 billion shares, slightly below the 20-session average of 18.57 billion.