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Update: Equity Markets Fall Intraday, Oil Rises Amid Middle East Tensions

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Update: Equity Markets Fall Intraday, Oil Rises Amid Middle East Tensions

(Updates with latest market prices and developments.)

US benchmark equity indexes were lower intraday, while oil prices rose as a ceasefire between Washington and Iran expired, with no indications of near-term engagement prospects.

The Dow Jones Industrial Average was down 0.5% at 53,484.5 after midday Monday, while the S&P 500 fell 0.4% to 7,756.7. The Nasdaq Composite dropped 0.3% to 26,647.9. Among sectors, communication services saw the steepest decline, while energy led the gainers.

West Texas Intermediate crude oil was up 1.3% at $83.44 a barrel, while Brent rose 1.4% to $89.77.

In June, the US and Iran agreed to a memorandum of understanding to end their war and negotiate a final deal. However, the truce apparently collapsed as tensions over the control of the Strait of Hormuz escalated.

Iranian Foreign Ministry spokesman Esmail Baghaei ruled out extending the memorandum of understanding, according to a CNBC report that cited state news agency Tasnim.

President Donald Trump warned that the US could attack Oman if the Gulf nation interferes with the blockade of Iranian ships in the Strait of Hormuz, The Wall Street Journal reported, citing an interview with Fox News.

On Saturday, Israeli strikes in southern Lebanon left at least 11 people dead, Reuters reported, citing the Lebanese health ministry. Traffic through the strategic waterway slowed as three vessels operated by Abu Dhabi National Oil Co. were attacked in transit last week.

"Prices remained supported by renewed fighting in Lebanon and attacks on vessels in the Strait of Hormuz, raising concerns over regional supply disruptions and complicating prospects for a US-Iran deal," ING Bank said in a report Monday.

US Treasury yields were mixed intraday, with the 10-year rate up 2.4 basis points at 4.72% and the two-year rate little changed at 4.17%.

In company news, JetBlue Airways (JBLU) shares were down 6.4%, as Seaport Research Partners downgraded its rating on the air carrier's stock. JetBlue's balance sheet woes could worsen as the Strait of Hormuz appears unlikely to reopen anytime soon, potentially prolonging jet fuel volatility, Seaport said in a note.

Shares of American Airlines Group (AAL), Southwest Airlines (LUV), United Airlines (UAL) and Delta Air Lines (DAL) were also in the red intraday.

Retail giant Walmart (WMT) is scheduled to release its latest financial results later this week, along with Home Depot (HD), TJX (TJX), Lowe's (LOW), Target (TGT), Ross Stores (ROST) and BJ's Wholesale Club (BJ).

The Federal Reserve is scheduled to post minutes of its July policy meeting Wednesday, which will be assessed for fresh insight on the central bank's monetary policy. At the meeting, policymakers left interest rates unchanged in a divided decision, with three regional presidents calling for policy tightening.

In economic news, homebuilder confidence in the US unexpectedly ticked higher this month, though builders continued to deal with rising construction costs amid a renewed surge in gas and diesel prices, the National Association of Home Builders and Wells Fargo said.

Gold was up 0.9% at $4,475.40 per troy ounce, while silver advanced 1.7% to $66.20.

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