Traders work on the NYSE floor
Stocks fell and oil rose on Thursday as investors assess negotiations to reopen the Strait of Hormuz and renewed hostilities in the Red Sea. AFP

Stocks fell and oil rose on Thursday as investors assess negotiations to reopen the Strait of Hormuz.

The S&P 500 dropped 0.18%, while the tech-heavy Nasdaq Composite fell 0.06%. The Dow Jones Industrial Average underperformed, decreasing 0.85%.

Oil prices jumped as a result of developments in the Middle East. Brent crude, the international benchmark, rose more than 4% and hovered just below $83 a barrel at 4:05 p.m. ET, while West Texas Intermediate, the U.S. benchmark, gained more than 3% and clocked in at $77.68 per barrel at the same time.

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The deal to reopen the Strait of Hormuz would exclude American and Israeli ships from transiting, according to Iran's state outlet Fars.

The outlet, according to an account from CNBC, claimed that cargo or other vessels from Israel would also be prevented from passing through the waterway. "Countries and individuals that have caused damage to Iran" would fall into the same category until harm made to the country is "compensated," the outlet added, citing a member of the country's parliament.

Iran will also issue penalties of up to 20% of the value of the vessel's cargo if the new rules are violated. They are a framework to resume negotiations between Tehran and Washington, which would begin a new 60-day period.

The plan has not been publicly confirmed by Iran, and the White House has not commented on it either.

However, President Donald Trump said late Wednesday that talks are "working out quite well," but again warned strikes could resume if they fail. "We are ready to go," he said.

Iranian Deputy Foreign Minister Kazem Gharibabadi, on his end, said the U.S. is ready to "return to commitments."

He did not elaborate, but was likely referring to the memorandum of understanding sign between the countries in mid June, where Iran agreed to allow for the passage of ships through the Strait of Hormuz without collecting fees for 60 days. The U.S. had made different commitments of its own, including the blockade of Iranian ports.