Tensions In The Middle East Continue To Escalate With Few Signs Of Concrete Progress. Stocks Edge Down And Oil Climbs

Stocks edged down and oil climbed on Monday as tensions in the Middle East continue to escalate.

The S&P 500 fell 0.19%, while the tech-heavy Nasdaq Composite remained largely unchanged, dropping 0.05%,. The Dow Jones Industrial Average fell 0.59% .

Brent crude, the international benchmark, gained almost 1% and stood just below $90 a barrel at 3:43 p.m. ET, while West Texas Intermediate, the U.S. benchmark, gained 0.79% and clocked in at $82.43 per barrel at the same time.

Prices had dropped earlier in the day after after an Iranian official said talks with the U.S. could be pursued again based on national interests.

Speaking in a press conference, Tehran's Foreign Ministry spokesman Esmail Baghaei said officials had continued exchanging messages with intermediaries despite escalating clashes with Washington.

Axios' Barak Ravid later cited a U.S. official who said that "right now, President Trump is focused on making Iran pay for their violations of the MOU and their continued acts of terrorism in the Strait of Hormuz."

"In addition, the President will make Iran pay for the recent deaths of U.S. soldiers. These devastating blows will continue until the President deems otherwise, but talks between our countries are continuing."

Elsewhere, Yemen's Houthi rebels, allies of Iran, declared a maritime embargo of Saudi Arabia.

The group said the decision is based on the "equation of 'an eye for an eye'" and will "respond to all escalation with all escalation, thus solidifying this equation."

It went on to threaten Riyadh further, saying it is ready "for all options, and any foolish act committed by the reckless Saudi enemy through all escalation will be met with a comprehensive and decisive escalation by Allah's will and power."

CNBC noted that Saudi Arabia has been diverting millions of barrels of oil per day from the Strait of Hormuz to the Red Sea as a result of the war between the U.S. and Iran. The Houthis preventing Riyadh from doing so would further exacerbate the disruption taking place in oil markets.

The decision follows a report noting that Iran had told the group to close the Bab el Mandeb strait in the Red Sea if clashes with the U.S. continue to escalate and Tehran makes the call.

Citing two senior Iranian sources and another regional one, Reuters detailed last week that the possibility has been discussed within Tehran's leadership and the Houthis have already been notified of the possibility.

The outlet also detailed that the rebel group has completed preparations for such a scenario, deploying missiles and drones near the waterway.