US stock markets closed lower in early trading hours on Monday, Beijing time. The Dow Jones Industrial Average declined by more than 300 points, while the S&P 500 index dropped 0.19%. Market attention remained fixed on the US-Iran situation, with international oil prices climbing after former US President Donald Trump stated Iran would pay for the deaths of American service members.

The Dow fell 307.16 points, or 0.59%, to 51,839.26. The Nasdaq Composite declined 12.17 points, or 0.05%, to 25,508.07. The S&P 500 decreased 14.41 points, or 0.19%, to 7,443.28.

The US conducted aerial strikes against Iran for a ninth consecutive night in retaliation for multiple Iranian attacks on tankers transiting the Strait of Hormuz. Iran's Houthi allies in Yemen announced a maritime blockade against Saudi Arabia.

However, investor sentiment saw a temporary improvement on Monday morning London time following remarks from Iranian Foreign Ministry spokesperson Ismaeil Baghaei, which raised hopes for a diplomatic resolution.

Baghaei told reporters that intermediaries continued to exchange messages with Iran during the latest round of US strikes and suggested the two adversaries could seek negotiations based on national interests.

Oil prices rose on Monday after former US President Donald Trump stated Iran would pay a price for the deaths of three American service members.

The international benchmark Brent crude futures increased approximately 1.3%, settling at $89.22 per barrel. US West Texas Intermediate crude futures gained 0.9%, closing at $83.23 per barrel. Oil prices have surged roughly 20% this month as fighting between the US and Iran escalated sharply.

Adam Crisafulli of Vital Knowledge wrote, "Investors still do not believe Trump has the appetite for a substantive escalation of the US military posture in the Middle East (i.e., deploying ground forces). If that is indeed the case, then some form of diplomatic resolution becomes inevitable."

Losses in the major indices were limited as chipmakers attempted to recoup some of last week's significant declines. Micron Technology was a leading gainer, rising over 1%. Astera Labs climbed more than 2%, Teradyne advanced 3%, and Advanced Micro Devices gained about 2%. The VanEck Semiconductor ETF (SMH) edged higher.

Darrell Cronk, President of the Wells Fargo Investment Institute and Chief Investment Officer for Wealth & Investment Management, stated, "The semiconductor and AI trade is undergoing a healthy reality check. Recent technical deterioration increases the risk of a deeper pullback toward long-term support levels, including the 200-day moving average."

He added, "A short-term tactical bounce would not be surprising given oversold conditions, but the medium-term uptrend has been broken."

All three major US stock indexes closed lower last week, with pressure on chip stocks dampening market sentiment. The SMH ETF recorded its third weekly decline in the past four weeks.