(Recasts with preliminary close of trading, adds analyst

comment)

* SpaceX surges after public debut

* Space stocks slide after rallying ahead of SpaceX debut

* Adobe drops after exit of CFO Dan Durn

By Caroline Valetkevitch and Johann M Cherian

June 12 (Reuters) - U.S. stocks ended higher on Friday

afternoon as investors held out hope for a peace deal between

Iran and the United States and as SpaceX shares surged in their

debut, making it Wall Street's biggest public listing in

history.

The United States and Iran signalled that an agreement to end

their war was close, with a senior U.S. administration official

saying a draft proposal was in place that was liked by both

sides. U.S. President Donald Trump has said several times since

mid-March that a deal with Iran to end the war was close.

Market participants were glued to shares of Elon Musk's SpaceX

, which began trading on the Nasdaq on Friday. Its

shares rose above the IPO price of $135 apiece, valuing the

company at more than $2 trillion.

Shares of other space stocks, which have soared in the

lead-up to the debut, eased on Friday, including Rocket Lab ( RKLB )

, Intuitive Machines ( LUNR ) and Planet Labs.

The reported progress in peace talks helped to lift

sentiment, said Jake Dollarhide, chief executive officer of

Longbow Asset Management in Tulsa, Oklahoma.

"There's still hope for a peace deal. Trump called off the

attacks ... Third parties are confirming a peace deal is

happening."

That puts pressure on oil prices and reduces worries about

higher inflation and interest rates, he said.

Investors were also looking ahead to next week's Federal

Reserve policy meeting, which will be the first under the

leadership of Kevin Warsh.

According to preliminary data, the S&P 500 gained

36.30 points, or 0.51%, to end at 7,431.83 points, while the

Nasdaq Composite gained 77.77 points, or 0.30%, to

25,887.43. The Dow Jones Industrial Average rose 353.42

points, or 0.71%, to 51,208.20.

U.S. equity funds saw their first weekly outflow in three weeks,

and earlier this week the technology index confirmed a

correction. Analysts believe some of the weakness in U.S. stocks

and bitcoin's fall last week could be due to traders

trimming holdings ahead of SpaceX's debut.

SpaceX is now ranked among the biggest publicly listed U.S.

companies.

Mike Dickson, head of research and quantitative strategies

at Horizon Investments in Charlotte, North Carolina, said he was

surprised by the lack of volatility in SpaceX so far, given the

hype around the IPO.

Shares of Tesla, another Musk company that trades at a

premium to its earnings, ended higher.

Only about 3% to 4% of SpaceX's shares are expected to be

available for trading, with a large allocation to retail

investors.

IPOs of AI companies OpenAI and Anthropic are also highly

anticipated later in the year.

SpaceX, which also includes Starlink and xAI, has already defied

some Wall Street conventions.

Some analysts have voiced caution, however, over the

fundamentals of the company, which posted more than $4 billion

in annual losses last year.

Among the day's decliners, Adobe slid after the exit of

CFO Dan Durn.