U.S. stocks closed lower on Thursday as the deadline for a U.S.-Canada trade deal draws near.

The Dow Jones Industrial Average decreased 137.65 points, or 0.53 percent, to 25,986.92. The S&P 500 fell 12.91 points, or 0.44 percent, to 2,901.13. The Nasdaq Composite Index decreased 21.32 points, or 0.26 percent, to 8,088.36.

U.S. President Donald Trump announced Monday that the United States and Mexico had reached a preliminary bilateral trade pact that would replace the North American Free Trade Agreement (NAFTA) and that Canada should join the deal or face tariffs against Canada's automobile manufacturing industry.

Canadian officials said they have been in extremely intense talks with their U.S. counterparts this week, working on some remaining sensitive bilateral disputes.

Trade concerns have kept a lid on stock gains in recent months as investors assessed the potential impact of protectionist trade policies on the global economy.

On the economic front, the number of Americans filing for unemployment benefits rose last week, but the underlying trend continued to point to a tightening labor market that should keep the economy on a strong growth path this year.

In the week ending Aug. 25, the advance figure for seasonally adjusted initial claims was 213,000, an increase of 3,000 from the previous week's unrevised level of 210,000, said the Labor Department on Thursday.

The four-week moving average was 212,250, a decrease of 1,500 from the previous week's unrevised average of 213,750. This is the lowest level for this average since Dec. 13, 1969 when it was 210,750, said the department.