Stocks fell on Wednesday as the U.S. and Iran traded fresh strikes and the end of the war remains out of sight.
The S&P 500 dropped 0.74% while the tech-heavy Nasdaq Composite fell further, recording a 0.89% decline.
Oil, in turn, rose following the developments. Brent crude, the international benchmark, rose more than 2% and stood just below $98 a barrel at 3:39 p.m., ET, while West Texas Intermediate, the U.S. benchmark, gained almost 2.5% and surpassed the $96 mark at the same time.
Ceasefire talks remain stalled in the meantime. One person was killed in Kuwait after a barrage involving drones and missiles. Flights were suspended in the country after the airport was struck.
The U.S. military also said it shot down Iranian drones near the Strait of Hormuz and targeted Iran's Qeshm Island.
Officials involved in the negotiations to end the war continue giving contrasting statements about the current scenario.
A top Iranian official said on Tuesday that a resumption of the war seems "inevitable" as Washington "demands our total surrender, and the Iranian nation will never surrender."
"When surrender is not an option, war lies ahead. Therefore, we are prepared and have no issue with war," said Mohammad Jafar Asadi, deputy head of Iran's central military command, Khatam al-Anbiya, according to state TV.
The official went on to say that the country has yet to play all of its "trump cards." "There are many capabilities that, if necessary, we will use."
Elsewhere, Mehr News agency reported that officials are still reviewing the U.S.'s latest proposal to end the war and have not provided an answer.
"Based on previous experiences, Iran is seeking tangible and real benefits," a source told the outlet. "The United States is concerned about war; we are concerned about an agreement."
President Donald Trump, on his end, said the regime has agreed not to pursue nuclear weapons, but noted that Tehran officials could still "change their mind."
"I did have to say we have to do something about Iran, because regardless of how well we're doing [economically] we can't let them have a nuclear weapon," he said in an interview with the New York Post's "Pod Force One" podcast.
"I mean, now they can change their mind, but that was one of the things they've had to agree, they've agreed to that. That was the big thing," Trump added. An Iranian official, however, told CNBC that Trump's words were "misleading."
