Updates to U.S. afternoon

By Caroline Valetkevitch and Harry Robertson

NEW YORK/LONDON, May 21 (Reuters) - Oil prices fell and U.S. stocks were mixed on Thursday as investors weighed the likelihood of progress in talks between the United States and Iran to end their war.

Oil prices had been higher earlier in the day, while major U.S. stock indexes were all lower, after Reuters reported Iran's supreme leader has issued a directive that the country's near-weapons-grade uranium should not be sent abroad, a hard stance against one of the main U.S. demands.

Iran Supreme Leader Ayatollah Mojtaba Khamenei's order could complicate talks on ending the Iran war, potentially making the conflict, which began on February 28 and has sent energy prices soaring, drag on.

U.S. President Donald Trump has assured Israel that Iran's stockpile of highly enriched uranium will be removed and that any peace deal must include the demand, Israeli officials have told Reuters.

U.S. crude CLc1 fell $1.91 to settle at $96.35. Brent LCOc1 declined $2.44 to settle at $102.58.

"Oil is down and below $100, and that's a good thing," said Adam Sarhan, chief executive of 50 Park Investments in New York. But also, Sarhan said, investors have remained upbeat about the outlook for stocks.

Shares of Nvidia NVDA.O, the world's biggest company by market capitalization, were last down 1.4% and off earlier lows.

Nvidia late on Wednesday reported earnings that beat Wall Street expectations and announced an $80 billion share repurchase program.

Investors were also watching developments in Turkey. Trading on Turkey's stock market was temporarily halted after sharp falls and the government's bonds slid after one of the country's top courts dealt the latest blow to the main political opposition party. The court annulled the Republican People's Party congress in 2023 at which its chairman, Ozgur Ozel, was elected.

The U.S.-traded iShares MSCI Turkey exchange-traded fund TUR.O was last down 9%.

In the Treasury market, the yield on benchmark U.S. 10-year notes US10YT=RR rose 0.6 basis points to 4.576%, from 4.57% late on Wednesday.

The Dow Jones Industrial Average .DJI rose 270.24 points, or 0.54%, to 50,279.59, the S&P 500 .SPX rose 7.70 points, or 0.10%, to 7,440.67 and the Nasdaq Composite .IXIC fell 6.15 points, or 0.02%, to 26,264.21.

"When you look at the normal economic environment surrounding this market, you would expect (stocks) to be lower, but if you believe the war will come to an end soon - that we're at a temporary high on energy prices, it does push you to look more not just at the underlying earnings that have been good but also the earnings potential that comes from AI," said Rick Meckler, partner at Cherry Lane Investments.

SpaceX unveiled its IPO filing late on Wednesday, giving the market its first glimpse into how much billionaire Elon Musk is spending on AI as he bets on transforming the rocket maker into a broader AI-led business.

MSCI's gauge of stocks across the globe .MIWD00000PUS rose 5.26 points, or 0.48%, to 1,106.91.
The pan-European STOXX 600 .STOXX index rose 0.04%.

The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro,
rose 0.26% to 99.39, with the euro EUR= down 0.3% at $1.1592. Against the Japanese yen JPY=, the dollar strengthened 0.18% to 159.19.

Spot gold XAU= fell 0.17% to $4,535.68 an ounce.