Wall Street's main indexes inched higher in choppy trading Thursday as broader gains across sectors countered declines in tech stocks, while investors assessed the fragility of a two-week Middle East ceasefire.
Israel bombed more targets in Lebanon, putting the ceasefire into jeopardy as Iran warned there would be no deal unless the bombing of Lebanon ceases, ahead of the war's first peace talks planned later in the week.
Few signs of traffic moving through the Strait of Hormuz heightened uncertainty around energy shipments, leading to a rebound in oil prices, though they remained below $100 a barrel.
The S&P 500 energy sector added 0.7% and utilities stocks were the biggest percentage gainers, up 1.8%.
"It's confusion over the ceasefire, the lack of clarity on what is involved and the fact that the ceasefire really hasn't happened yet... the market is saying maybe it's not as clear as we initially thought," said Dustin Thackeray, partner and head of portfolio management at Crewe Advisors.
At 12:05 p.m. EST, the Dow Jones Industrial Average rose 248.32 points, or 0.52%, to 48,158.24, the S&P 500 gained 41.41 points, or 0.61%, to 6,824.25 and the Nasdaq Composite gained 178.21 points, or 0.78%, to 22,811.08.
Consumer discretionary stocks supported the S&P 500, led by a 3.7% gain in Amazon.com after its CEO said AI services at its cloud-computing unit were generating annualized revenue of over $15 billion.
That offset declines on the S&P 500 technology sector , with Microsoft and Apple falling 1.4% and 0.5%, respectively. Software stocks came under pressure with the iShares Expanded Tech-Software ETF down 3.9%.
Gains in Caterpillar and Honeywell countered declines in Salesforce and IBM, buoying the Dow.
"The Iran conflict happened and software stocks didn't sell off as much as others... maybe there's just some profit-taking and repositioning in those names," said Thackeray.
The moves come a day after the S&P 500 and Nasdaq marked their biggest one-day jumps in over a week, and the Dow in a year.
Meanwhile, data showed U.S. inflation increased as expected in February and likely rose further in March amid the Iran war, while economic growth slowed more than previously estimated in the fourth quarter.
Friday's consumer prices index number for March will grab the spotlight as investors wait to see the economic impact of elevated oil prices stemming from the conflict.
Money market participants are expecting only about 30% chances of a 25 basis-point interest rate cut by end-2026, compared with a 56% chance a day ago, per LSEG-compiled data.
They expected two cuts this year before the war broke out, while bets for a rate hike in December had also risen during the conflict.
Among movers, Constellation Brands jumped 6.4% after the Corona beer maker posted a smaller-than-expected drop in fourth-quarter sales.
Carlyle dipped 1.8% after its flagship private-credit interval fund was hit by a wave of redemptions, in the latest sign of issues in the credit space.
Advancing issues outnumbered decliners by a 1.15-to-1 ratio on the NYSE and by a 1.14-to-1 ratio on the Nasdaq.
The S&P 500 posted 39 new 52-week highs and 19 new lows while the Nasdaq Composite recorded 85 new highs and 113 new lows.
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