U.S. stocks closed mostly lower on Monday as U.S. President Donald Trump’s fresh warning to Tehran and his comments on U.S. talks with Iran boosted optimism over an escalating Middle East war.

Trump said that the US It is in serious discussions with a “more reasonable regime” to end the war, but repeated its threat to open the Strait of Hormuz or risk a US attack on Iran’s oil wells and power plants. Iran called the US peace proposals unrealistic.

Investors have focused on how oil prices will affect the global economy since the start of the war.

“The administration continues to send mixed messages,” said Rick Meckler, a partner at family investment office Cherry Lane Investments in New Vernon, New Jersey.

“When the messages sound good, to the extent they are perceived, that helps the market. If they say something that suggests a more aggressive approach, the market sells off.”

At the same time, conflict is escalating. Yemen’s Iran-backed Houthi militia entered the fray over the weekend. All three major indices opened the day after sharp declines in the previous session. Since the battle began, the Dow, Nasdaq and small-cap Russell 2000 have all confirmed correction territory, ending 10% lower from their record-high closes.

According to preliminary data, the S&P 500 fell 25.52 points, or 0.40%, to close at 6,343.33, while the Nasdaq Composite lost 153.16 points, or 0.73%, to 20,795.20. The Dow Jones Industrial Average rose 53.27 points, or 0.12%, to 45,219.91.

Comments from Federal Reserve Chairman Jerome Powell gave stocks some support. Powell said long-term inflation expectations appear to be holding despite the current energy shock, and the Fed does not yet need to make a decision on how to respond to the recent headwinds. Both US crude oil and Brent settled higher.

According to CME Group’s FedWatch tool, money market participants priced out any easing from the Federal Reserve this year compared to the two cuts expected before the war began. The S&P 500 energy index was down slightly and technology stocks were among the biggest drags on the S&P 500. On the other hand, the financial index rose after the US Department of Labor released long-awaited guidelines to clarify how trustees can add discretionary assets to 401(k) retirement plans.

Shares of asset managers were higher with both Blackstone and KKR.