US equity indexes rose on Thursday after an agreement for a 10-day ceasefire between Israel and Lebanon removed a major obstacle to Middle East diplomacy in finding a lasting Iran peace deal.
Crude oil futures, however, remained higher as the US warned Iran of military action should it fail to reach a deal in a potential second round of peace talks in Pakistan.
The Nasdaq Composite rose 0.4% to 24,102.70, with the S&P 500 up 0.3% to 7,041.28, and the Dow Jones Industrial Average higher by 0.2% to 48,58.2. Energy, real estate, and technology led the gainers. Health care was the worst performer.
President Trump said the US might hold discussions with Iran this weekend, The Wall Street Journal reported. "We're very close to making a deal," the president told reporters outside the White House, according to the WSJ. Trump said he wasn't sure the current two-week ceasefire in the war would need to be extended, according to the report.
Earlier on Thursday, Trump said on Truth Social that Lebanon and Israel have agreed to a 10-day ceasefire starting 5 pm ET. Lebanese Prime Minister Nawaf Salam said he welcomed the decision. In a follow-up social media post on Thursday, Trump said he plans to invite the Lebanese President, Joseph Aoun, and Israel's Prime Minister Benjamin Netanyahu to the White House for talks.
Meanwhile, US Defense Secretary Pete Hegseth said Thursday that the naval blockade of Iran is an example of "polite" behavior during the ongoing ceasefire, and US forces are ready to strike power plants and the energy industry in the country, if ordered, according to a report from Reuters.
Iranian officials and Pakistan's army chief, Asim Munir, are said to have met in Tehran on Thursday to discuss messages between Tehran and Washington, according to a CNN report. The White House expressed optimism about reaching a deal, saying the second round of talks would likely be held in Pakistan.
The CBOE Volatility Index fell 1.5% to 17.91, after trading as high as 19.09 earlier in the session.
West Texas Intermediate crude oil futures rose 2.3% to $93.56, and Brent crude futures jumped 3.3% to $98.20.
US Treasury yields traded mixed, with the 10-year up 3.8 basis points to 4.32%.
In precious metals, gold futures fell 0.2%% to $4,811.9 and silver futures declined 1.2% to $78.66.
In economic news, US initial jobless claims fell to 207,000 in the week ended April 11 from a downwardly revised 218,000 in the previous week, compared with expectations for a smaller decrease to 213,000 in a survey of analysts compiled by Bloomberg.
"The conflict in Iran is unlikely to cause significant disruptions in the US labor market," Thomas Simons, Chief Economist at Jefferies, said in a note. "There are many vulnerable points in the global economy that are at risk in the near-term due to potential shortages of all sorts of commodities, but for better or worse, the US economy is likely going to be the most insulated in the world."
US industrial production fell by 0.5% in March, compared with expectations for a 0.1% increase in a Bloomberg-compiled survey, and following an upwardly revised 0.7% increase in February.
In company news, Charles Schwab (SCHW) shares dropped 7.6% intraday, the steepest decline on the SP 500, after the company reported Q1 net revenue below analysts' expectations.
Boeing (BA) is ramping up its hiring, reaching about 100 to 140 factory workers a week, in a bid to replace retiring workers and support increasing production rates, Reuters reported Thursday, citing an interview with a union leader. Shares of the aircraft manufacturer dropped 2.3% intraday, the Dow's worst performer.