(Updates with U.S. closing market levels)

* Oil gains; hopes of US-Iran talks weighed against Houthi

threat

* Some US megacaps, high-profile semis due to report this

week

* US stocks end lower

By Caroline Valetkevitch and Alun John

NEW YORK/LONDON, July 20 (Reuters) - Major stock indexes

fell on Monday with investors cautious about developments in the

U.S.-Iran war and ahead of earnings from some high-profile U.S.

companies this week. Oil prices gained.

Yemen's Iran-aligned Houthis said they would impose a naval

blockade on Saudi Arabia. The announcement was made despite

signs that Tehran and Washington want to resume diplomacy to

halt a worsening cycle of attacks.

Brent crude futures rose around 1.3% to settle at $89.22

a barrel, while U.S. West Texas Intermediate crude gained

0.9% to settle at $83.23 after touching its highest level since

June 12 at $85.39.

Higher oil prices tend to be a negative for stocks because they

increase costs for consumers and businesses.

More U.S. companies are set to report earnings results this

week, including several major firms such as Intel ( INTC ) and

Alphabet.

"Earnings are starting to flow ... and that's a cushion for the

market," said Peter Cardillo, chief market economist at Spartan

Capital Securities in New York.

In addition, he said chipmaker shares recovered some of their

recent sharp losses. An index of semiconductors rose 0.6%

on Monday after ending Friday down more than 20% from its late

June closing record high, a move that confirms it has been in a

bear market.

The Dow Jones Industrial Average fell 307.16 points, or

0.59%, to 51,839.26, the S&P 500 fell 14.41 points, or

0.19%, to 7,443.28 and the Nasdaq Composite fell 12.17

points, or 0.05%, to 25,508.07.

The earnings season will reinforce or challenge this year's

gains, which have been driven by a surge in AI capital spending

lifting semiconductor stocks and other companies that are seen

as the beneficiaries of the buildout.

The season will provide some insight into the AI-related

trade, including for chipmakers, and also provide more color on

secondary effects of the war.

MSCI's gauge of stocks across the globe fell

3.23 points, or 0.29%, to 1,105.50. The pan-European STOXX 600

index fell 0.3%.

U.S. Treasury yields rose as traders weighed escalating oil

prices, driven by the widening war with Iran, and the impact on

prices.

The U.S. economic calendar for the week is light, and Federal

Reserve officials are in a "blackout period" of public comments

ahead of the central bank's meeting next week. The yield on

benchmark U.S. 10-year notes rose 5.68 basis points

to 4.598%.

The European Central Bank will hold a policy meeting later this

week, with markets pricing in only a 13.1% chance of a hike,

according to LSEG data.

Sterling weakened 0.12% to $1.3437 after climbing to

$1.3481 as Andy Burnham took over from Keir Starmer to become

Britain's seventh prime minister in a decade. He pledged to

reshape the country's politics and deliver a new economic model.

The dollar index, which measures the greenback against a

basket of currencies, climbed 0.18% to 100.92, with the euro

down 0.19% at $1.1417.

Spot gold fell 0.24% to $4,007.00 an ounce.