Oil Plummeted On Hopes Of U.S.-Iran Talks But Chipmakers Dropped. Stocks Were Mixed Overall

Stocks were mixed on Monday as the market received contrasting signals: oil plummeted on hopes of U.S.-Iran talks, which brought optimism to the stocks market, but chipmakers dropped again.

The Dow Jones Industrial Average gained 0.51%, while the S&P 500 was largely unchanged, gaining 0.02%. The tech-heavy Nasdaq Composite underperformed, dropping 0.18% dragged by chipmakers.

CNBC noted that the VanEck Semiconductor ETF fell about 2%, dragged by AMD, Teradyne and Micron, among others. However, most stocks bounced from session lows hit earlier in the day.

On the geopolitical front, President Donald Trump warned of "very strong military action" against Iran if talks between the countries are unfruitful.

Speaking to Axios, Trump said the U.S. is in "very deep talks" with Tehran but promised to escalate significantly if they don't yield results soon.

Asked how long he will give for diplomacy, he replied: "Not much time. Either it goes fast or not at all."

The U.S. has not conducted new attacks since Friday, leading Iran to hold its own military action, which has targeted different Gulf countries.

Axios detailed in another report that Brad Cooper, the commander of the U.S. Military Central Command (CENTCOM), said the current campaign hit its limit of effectiveness.

The outlet noted that Cooper recommended the U.S. stop bombing Iranian assets around the Strait of Hormuz as a result, playing a role in President Donald Trump's decision to halt attacks.

"All of the people that deal with Iran asked me: 'Don't fire,'" Trump told Axios on Monday, noting that he believes Tehran wants to make a deal.

However, oil prices plummeted as hostilities ceased. Brent crude, the international benchmark, fell 6.89% and clocked in at $85.36 per barrel at 4:06 p.m. ET, while West Texas Intermediate, the U.S. benchmark, dropped further, plunging 8.22% and standing below $82 a barrel at the same time.

Despite Trump's remarks, Iranian Foreign Ministry spokesperson Esmaeil Baghaei said earlier in the day that Iran is not seeking more talks with the U.S.

Speaking in a press conference on Monday, Baghaei said the country had not asked to resume talks because it is not on the country's "DNA."

He went on to say that Tehran still controls the Strait of Hormuz, where it has been targeting ships that do not coordinate passage with its forces. Iran will seek to charge tolls for passage.

In fact, Iranian media outlets said the country turned around six "offending ships" that sought to cross the waterway without authorization.