The war ended in a stalemate because of Chinese involvement. The Chinese had a massive army that was able to balance out the UN forces and push them back down the peninsula after they had made it as far the border with China.
Another reason is that the US did not want to pursue an all-out war against China. Macarthur wanted to attack China with nuclear weapons but Truman disagreed - after arguing with the President, Macarthur was sacked.
Truman looked for peace and a cease-fire was agreed in 1963.
.The US's desire to keep the war limited is maybe a further reason why the war ended in a deadlock.
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