The setting of the story is very important to create the spooky mood that contributes to the horror. Notice that the scene is first described as being almost dark.
It was about dusk, one evening during the supreme madness of the carnival season, that I encountered my friend.
It is dusk, which is a spooky time of night. The impending dark symbolizes impending doom. The carnival season is described as “supreme madness,” which reinforces the idea that there is chaos and a lack of inhibition about. This kind of environment is conducive to wickedness.
Local customs are part of the setting too. The carnival season in Italy allows people to not be themselves. Fortunato is dressed in motley, like a clown, with “tight-fitting parti-striped dress” and a “conical cap and bells” on his head. He is drunk, because it is a party. All of this contributes to the strange macabre juxtaposition of gaiety and grimness.
The sense of horror is increased as things get darker and the scene moves underground. When Montresor lures Fortunato into the catacombs, we know that trouble is coming.
I passed down a long and winding staircase, requesting him to be cautious as he followed. We came at length to the foot of the descent, and stood together upon the damp ground of the catacombs of the Montresors.
The winding staircase, the shining torches, and the damp ground of the tomb are all specific details of the setting that contribute to horror. The catacombs are tunnels underground that were used as tombs. Montresor’s family uses this catacomb. Since we already know that Montresor wants to get revenge on Fortunato for some undescribed injury, we can only guess that no good will come of this.
It is because it is carnival and no one will miss them, and because they go deep underground at dusk, that Montresor is able to murder Fortunato and make sure that no one will find the body.