The festivities of the carnival setting further add to the atmosphere of horror as we see that Montresor plans to slyly torment Fortunato on their entire journey to the impressive Amontillado as when he mentions Fortunato's rival, Luchresi, or as later in the catacombs when he gives a farcical "secret" sign of the Masonic Lodge in the form of his trowel: "'You jest,' [Fortunato] exclaimed, recoiling a few paces." It is Fortunato's greed to taste the Amontillado that compels him headlong into Montresor's trap, causing him to leave the company of the festive carnival to enter death's catacomb's, even though he seems to have a social engagement although he denies it: "'I perceive you have an engagement.' ... 'I have no engagement,....'"
When they get to the fourth and final setting, to the destination selected by Montresor, to the place where he will use his trowel--which he earlier brandished in a compulsive mock jest before Fortunato--to wall in his drunken, gullible enemy, the horror is magnified by the surprises and twists abruptly introduced here. The menaces of this setting enhance the atmosphere of horror because we are as confused by it as Fortunato himself is as he walks into a niche--which symbolically marks the end of his good fortune--where he "stood stupidly bewildered." Neither we nor he can fathom the meaning of the niche, nor of the "rock" that blocks his path, nor of the "fetters" that astound us as they astound him, nor of the purpose of Montresor digging purposefully about in "a pile of bones." The surprises and twists of this fourth setting serve to enormously enhance the atmosphere of horror as bewilderment, confusion and astonishment--"He was too much astounded to resist ... [and] not yet recovered from his astonishment"--immobilize Fortunato while bewildering and shocking us.
To summarize, this analysis reveals that Poe prominently uses three techniques related to setting to enhance the atmosphere of horror in the story: (1) the contrapuntal natures of the two early settings, i.e., the carnival of joy as a contrasting counterpoint to the catacombs of death; (2) the mounting details revealing the mounting dangers of the catacomb crypts, including farcical or ironic details, e.g., the farcical jolly bells of Fortunato's costume, the ironic nitre dripping, which is potassium nitrate and potentially dangerous to lungs; (3) the surprises that twist the pattern of what has already occurred, e.g., that the succession of deep crypts should end in a darkened "niche" where "his progress [was] arrested by the rock."
One of the hallmarks of Gothic literature is a creepy or un-homelike setting, and Poe uses a setting of dark, underground catacombs to evoke the eerie and establish an atmosphere of horror (atmosphere and mood are interchangeable terms meaning the same thing).
The vaults into which he and Fortunato descend, down a long and winding staircase, are damp and moldy. In the "innermost recesses" of the catacombs, nitre hangs "like moss" on the walls (nitre: potassium nitrate, which is a lung and skin irritant interfering with bloodflow).
Our sense of horror increases as the descent into the catacombs grows deeper and damper; Montresor informs Fortunato that they are now below river level, and water trickles in on the piles of skeletons lining the walls. It also becomes darker--when they arrive at the end of the journey their torches glow rather than flame--because of decreased oxygen.
We also learn, as Fortunato begins to scream at being walled in and Montresor joins him in screaming, that no one can hear them. Montresor could have taken Fortunato to a modern but isolated building by the light of day and walled him up, but it wouldn't have conveyed the same horror as this dark, damp, lonely underground setting, with its layers of history and piles of Montressor ancestral skeletons, the scent of decay all around.
Edgar Allan Poe's use of a festive backdrop for the initial setting--the carnival--for his macabre short story, "The Cask of Amontillado," makes the telling of the tale all the more horrifying. The creepy descent into the Montressor family catacombs--an underground burial ground--was an inspired--contrasting--horror setting (contrasting while still blending with the exuberant festival). The irritating nitre-encrusted walls, the need for a torch in the darkness, the deep descent, and the visible skeletal remains are all perfect props to create the eerie, horrorific atmosphere of the story. Fortunato's dress--that of a court jester, a clown--adds ironically to the setting and to the atmosphere of horror.