U.S. stocks closed lower on Thursday, with the Dow Jones Industrial Average falling nearly 0.67%, the S&P 500 declining over 0.33%, and the Nasdaq Composite edging down. Uncertainty surrounding U.S.-Iran peace talks weighed on the market, as Iran is reviewing a ceasefire proposal that would leave the most contentious issues unresolved. Meanwhile, semiconductor stocks, which have been leading the market higher, retreated after recent gains.

ARM Holdings plunged 10% despite strong earnings forecasts, as concerns over insufficient supply capacity for its new generation of AI chips overshadowed positive news. Intel and Advanced Micro Devices also declined, giving back some of their gains from earlier in the week.

Keith Buchanan, a senior portfolio manager at Global Investments, stated that he currently hopes to see the market rally broaden out from chipmakers and other AI-related companies to more sectors.

"Market leadership has narrowed again. From our analytical framework, that is a concern. We believe that for the bull market to continue, market participation needs to be at the level it should be. Therefore, earnings season is critical, and we are in the peak of it. This will give us a clearer view of the market's main narrative and, frankly, show that market momentum must spread beyond the areas it has been concentrated in over the past week and a half."

Other notable stock movements on Thursday included cloud service provider CoreWeave, which closed down over 6% but rose in after-hours trading after reporting quarterly revenue that exceeded analyst expectations. The company cited strong demand for its high-performance computing services used to train and deploy AI models.

Cloud monitoring service provider Datadog saw its shares surge 31% after raising its full-year profit forecast. Cybersecurity firm CrowdStrike advanced 8%, and Palo Alto Networks gained 7%.

In other market news, appliance manufacturer Whirlpool plummeted nearly 12% after reporting first-quarter sales that missed expectations and suspending its dividend.

Investors are now turning their attention to the U.S. non-farm payrolls report due on Friday, which is expected to show continued resilience in the labor market.