Wall Street's main indexes neared its record closing high as investor were optimistic about the prospects to resolve the Middle East conflict while they assessed the latest batch of bank earnings and U.S. inflation readings.

Talks to end the Iran war could resume in Pakistan over the next two days, U.S. President Donald Trump told the New York Post on Tuesday (April 14), after the collapse of weekend negotiations prompted Washington to impose a blockade on Iranian ports.

Meanwhile, Israeli and Lebanese envoys went into the talks hosted by U.S. Secretary of State Marco Rubio with conflicting agendas as Israel demanded Beirut disarm Iran-aligned Hezbollah.

With volatile oil prices dramatically impacting inflation expectations, the market has been highly sensitive to developments in the Middle East, with any headlines about setbacks sending stocks lower, while even tentative signs of an off-ramp have been sufficient to encourage investors eager for positive news.

Meanwhile, Tuesday's inflation data also provided some encouragement as U.S. producer prices increased less than expected in March as the cost of services was unchanged.

The S&P 500 gained 81.14 points, or 1.18%, to end at 6,967.38 points, while the Nasdaq Composite gained 455.35 points, or 1.96%, to 23,639.08. The Dow Jones Industrial Average rose 317.74 points, or 0.66%, to 48,535.99.

-Lisa Bernhard, Roselle Chen/Reuters