There are two problems that you may need to fix.
Issue #1
You say that you have a M3 MacBook Pro with the base M3 chip. That computer did not originally ship with the ability to drive a second monitor with the lid closed. The hardware was there, but the software was not finished, and Apple's Technical Specifications said that machine could drive a maximum of one external display.
Later, Apple announced that they intended to bring the "drive a second display when the lid is closed" feature to your machine via a software update.
That software update was macOS 14.6 – but according to your tag line, you're running macOS 14.5. If you are not running 14.6 or later, you need to update.
What's new in the updates for macOS Sonoma - Apple Support
Issue #2
Macs do not support DisplayPort MST daisy-chaining. You cannot connect one monitor via USB-C (DisplayPort) and then run a cable from a DisplayPort OUT port on that monitor to a second monitor.
If your Mac supports two or more external monitors, the only supported way to connect two monitors to one Mac host port is for the device connected directly to the Mac to be a Thunderbolt device connected by a Thunderbolt cable. (A Thunderbolt connection provides a wider "data highway" than a USB-C (DisplayPort) one, and the Mac wants to see that wider highway even if the two displays in question have fairly low resolution.)
There are a number of Thunderbolt docks and hubs that will support connecting two non-Thunderbolt displays or adapters, with resolutions of up to 4K @ 60 Hz each. They may bring out video signals on
- Dedicated video ports – HDMI, DisplayPort, or Mini DisplayPort
- Thunderbolt daisy-chaining ports
- Downstream Thunderbolt hub ports (for docks or hubs that split one Thunderbolt chain into several)
- Some combination
If you want to use two external monitors, but do not want to get a Thunderbolt dock, hub, or dual-display adapter, then you will need to plug each monitor (or adapter) into a different USB-C port on your M3 MacBook Pro.