The S&P 500 and the Dow closed modestly higher as risk appetite driven by AI fervour was counterbalanced by tensions arising from US-Iran talks to reopen the Strait of Hormuz and end the months-long war.
Gains in most of the 11 major S&P sectors kept the S&P 500 and the Dow in the green, with the small-cap Russell 2000 outperforming its larger-cap peers. The Nasdaq ended the session nominally higher.
Small-cap stocks have been some of the biggest beneficiaries of the ongoing enthusiasm surrounding artificial intelligence stocks, which provided some upside muscle. The Philadelphia SE Semiconductor Index advanced 5.9 per cent.
The Software & Services Index, battered in recent months over worries of AI disruption, ended off 3.3 per cent.
Tehran is studying a US proposal to bring the war to a halt, but has not been in contact with Washington for days, according to Iranian media, which also said Iran is taking a "stern" approach, given what it views as a history of US noncompliance and mutual distrust.
The war has sent crude prices soaring, reviving worries over inflation and giving rise to an increasing likelihood that the US Federal Reserve could hike interest rates by year-end.
On the economic front, a report from the Labor Department showed an unexpected spike in job openings, driven by the volatile professional and business services sector.
Otherwise, hiring, firing and quits all decreased, suggesting a slowdown in labour market churn in the face of uncertainties related to strife in the Middle East and inflationary effects.
Analysts look to the May employment report due on Friday, which is expected to show the US economy added 85,000 jobs last month, a monthly deceleration of 26.1 per cent. The unemployment rate is forecast to stand pat at 4.3 per cent.
The Dow Jones Industrial Average rose 228.91 points, or 0.45 per cent, to 51,307.79, the S&P 500 gained 9.94 points, or 0.13 per cent, to 7,609.90 and the Nasdaq Composite gained 7.09 points, or 0.03 per cent, to 27,093.90.
Among the 11 major sectors of the S&P 500, utilities gained the most, while communication services suffered the steepest percentage loss.
Advancing issues outnumbered decliners by a 1.52-to-1 ratio on the New York Stock Exchange. There were 571 new highs and 139 new lows on the NYSE.
On the Nasdaq, 2,280 stocks rose and 2,506 fell as declining issues outnumbered advancers by a 1.1-to-1 ratio.
The S&P 500 posted 29 new 52-week highs and 17 new lows while the Nasdaq Composite recorded 134 new highs and 96 new lows.
Volume on US exchanges was 20.51 billion shares, compared with the 19.93 billion average for the full session over the last 20 trading days.
