Wall Street closed slightly higher on Thursday, driven by defensive stocks. Investor sentiment remained cautious as traders favored defensive stocks amid economic uncertainty and ongoing peace talks. All three benchmark indexes ended in the green with the Dow Jones eking out a record closing high.

How Did the Benchmarks Perform?

The Dow Jones Industrial Average (DJI) rose 0.6%, or 276.31 points, to close at 50,285.66. Nineteen components of the 30-stock index ended in positive territory, while 11 ended in negative.

The tech-heavy Nasdaq Composite added 22.74 points, or 0.1%, to close at 26,293.10.

The S&P 500 gained 12.75 points, or 0.2%, to close at 7,445.72. Six of the 11 broad sectors of the benchmark index closed in the green. The Utilities Select Sector SPDR (XLU), the Consumer Discretionary Select Sector SPDR (XLY) and the Materials Select Sector SPDR (XLB) advanced 1%, 0.8% and 0.7%, respectively, while the Consumer Staples Select Sector SPDR (XLP) declined 1.6%.

The fear gauge CBOE Volatility Index (VIX) decreased 3.9% to 16.76. A total of 17.67 billion shares were traded on Thursday, lower than the last 20-session average of 18.57 billion. Advancers outnumbered decliners by a 1.51-to-1 ratio on the NYSE, and by a 1.66-to-1 ratio on the Nasdaq.

Wall Street Edges Higher as Investors Monitor Iran Peace Talks

Wall Street edged higher on Thursday as investors adopted a cautious approach and moved toward defensive sectors amid ongoing economic and geopolitical uncertainty. Market sentiment remained restrained despite modest gains in the major indexes, with traders closely monitoring developments surrounding U.S.-Iran peace talks.

Investor focus centered on reports of limited progress in diplomatic discussions involving Iran’s uranium program and the future control of the Strait of Hormuz, a key global oil transit route. While hopes of a potential breakthrough supported sentiment at times, conflicting statements from both sides kept uncertainty elevated and contributed to volatile trading throughout the session. Secretary of State Marco Rubio said talks had shown “some good signs,” but noted a diplomatic agreement would be difficult if Iran moved ahead with plans to impose tolls in the Strait of Hormuz, a critical oil shipping passage.

The session reflected a broader wait-and-watch mood on Wall Street as investors balanced optimism over possible diplomatic progress against concerns about inflation, interest rates and global economic stability. Consequently, shares of Target Corporation (TGT Quick QuoteTGT - Free Report) and NRG Energy, Inc. (NRG Quick QuoteNRG - Free Report) added 3.1% and 2.2%, respectively. Both currently carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank stocks here.

Oil Prices Drop Amid Uncertainty Over Iran Conflict

Oil prices swung sharply on Thursday before ending lower as uncertainty surrounding the U.S.-Israeli conflict with Iran continued to pressure energy markets and raise concerns over potential supply disruptions. Brent crude futures settled at $102.58 per barrel, down $2.44 or 2.3%, while WTI crude closed at $96.35, falling $1.90 or 1.9%. Both benchmarks finished at their lowest levels in nearly two weeks.

Economic Data

For the week ended May 16, initial jobless claims came in at 209,000, a decrease of 3,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 211,000 to 212,000. The 4-week moving average was 202,500, a decrease of 1,500 from the previous week's revised average. The previous week's average was revised up by 250 from 203,750 to 204,000.

Continuing claims during the week ended May 9 were 1,782,000, an increase of 6,000 from the previous week's revised level. The previous week's level was revised down by 6,000 from 1,782,000 to 1,776,000. The four-week moving average was 1,773,000, a decrease of 6,500 from the previous week's revised average. The previous week's average was revised down by 1,500 from 1,781,000 to 1,779,500.

Per the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, Housing Starts for April came in at 1,465,000. The number for March was revised up to 1,507,000 from the previously reported 1,502,000. Building Permits were 1,442,000 for April. The number for March was revised down to 1,363,000 from the previously reported 1,372,000.

Per the Philadelphia Fed, the diffusion index for current general activity fell from 26.7 in April to -0.4 in May after rising in each of the previous four months.