U.S. stock markets traded cautiously on Wednesday amid ongoing uncertainty surrounding potential developments in Middle East peace negotiations. Investors focused on the prospect of a breakthrough as Iran’s state television reported that Tehran had received a draft framework from the United States aimed at restoring shipping through the Strait of Hormuz within a month. The agreement reportedly involves a U.S. military withdrawal and the lifting of a naval blockade.

At 9:57 a.m. Eastern Time, the Dow Jones Industrial Average advanced 174.37 points, or 0.35%, reaching 50,642.33. The S&P 500 inched up 2.37 points, or 0.03%, to 7,521.49, while the Nasdaq Composite edged down 3.30 points, or 0.01%, to 26,651.99. Six of the 11 main S&P 500 sectors posted gains, led by consumer discretionary, which rose 1.4%. Conversely, the energy sector declined 1.5%, reflecting a drop in oil prices, and technology stocks slipped 0.2% after the Nasdaq had hit a record high the previous day.

The equity markets have been buoyed recently by a robust earnings season and projections of approximately 29% year-on-year growth for the first quarter. Micron Technology notably crossed a $1 trillion market capitalization mark, with its shares rising 3.8%. Peer companies Western Digital and Seagate Technology also saw gains of 2.5% and 3.2%, respectively. However, the Philadelphia Semiconductor Index fell 0.7%, dragged down by a 1.7% decline in Nvidia shares.

Market participants remain cautious about the outlook following the earnings season. Nancy Tengler, CEO and CIO of Laffer Tengler Investments, noted concerns over a potential shift in market focus once earnings reports conclude, which could turn attention toward Federal Reserve policy decisions and ongoing Middle East developments.

In other corporate news, cloud security firm Zscaler's stock plummeted 30% after issuing a disappointing revenue forecast for the fourth quarter. GlobalFoundries shares dropped 9% after reports surfaced that Mubadala Investment Company, the firm’s majority owner, was seeking to raise $1.91 billion through an unregistered block sale of company shares. Meanwhile, Bath & Body Works gained 16.5% following first-quarter results that surpassed analysts’ expectations for sales and profits.

Looking ahead, investors will turn their focus to Thursday’s release of the personal consumption expenditures (PCE) index, a key inflation gauge closely watched by the Federal Reserve. The data could influence future monetary policy under Fed Chair Kevin Warsh. Currently, money markets mostly price in the possibility that the Fed will maintain interest rates at current levels throughout the year, with some speculation about a potential 25 basis point hike in December.

On exchanges, advancing stocks outnumbered decliners by a ratio of 1.31-to-1 on the New York Stock Exchange and 1.15-to-1 on the Nasdaq. The S&P 500 recorded 29 new 52-week highs and five new lows, while the Nasdaq posted 106 new highs and 44 new lows.