Wall Street Stocks Fall as Oil Prices Rise Amid Iran Tension/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stocks edged lower Tuesday as rising oil prices and weaker retail spending rattled investors. Mounting geopolitical tensions between Israel and Iran added to market anxiety. The Federal Reserve began its latest policy meeting with no expected rate change.
Market Movement Quick Looks
- S&P 500 slips 0.4%: Dow and Nasdaq also dip in early trading.
- Retail sales fall: Consumer spending weaker than expected in May.
- Oil prices surge: Brent and WTI crude climb amid Iran conflict.
- Solar stocks plunge: Fears grow over potential rollback of green tax credits.
- Fed meeting begins: Central bank expected to hold rates steady.
- Bond yields ease: 10-year Treasury yield down to 4.42%.
Wall Street Stocks Fall as Oil Prices Rise Amid Iran Tension
Deep Look
Wall Street Pulls Back
Markets opened lower Tuesday as investors reacted to weak U.S. retail sales and rising crude oil prices driven by geopolitical uncertainty.
By 9:35 a.m. Eastern, the S&P 500 was down 0.4%, the Dow Jones Industrial Average lost 129 points (0.3%), and the Nasdaq Composite slipped 0.4%.
Retail sales data released early Tuesday indicated a 0.9% decline in May, worse than economists had forecast. Excluding volatile categories, some retail segments held steady, but the data signaled consumers are starting to scale back after an earlier spring surge to beat tariff-related price hikes.
“Consumers are downshifting, but they haven’t slammed the brakes,” said Ellen Zentner, chief U.S. economist at Morgan Stanley.
Global Tensions Shake Oil Markets
Simultaneously, concerns over the escalating Israel-Iran conflict sent oil prices climbing again.
President Donald Trump, returning early from the G7 summit, issued a warning urging Tehran residents to evacuate, adding to fears of a broader Middle East conflict.
Iran’s control of the Strait of Hormuz, a key oil shipping lane, has traders on edge.
- U.S. crude rose 1.6% to $71.39 per barrel
- Brent crude jumped 2% to $74.66
This renewed surge follows a 7% gain last Friday, with prices momentarily calming on Monday before resuming their upward trend.
Solar Stocks Take a Hit
While high oil prices often benefit alternative energy stocks, Tuesday saw solar companies tumble on political concerns.
Fears that Congress may roll back clean energy tax credits triggered sharp selloffs:
- First Solar plunged 21.7%
- Enphase Energy dropped 27.4%
Investors are reassessing the outlook for green energy, especially as the Senate weighs tax revisions that could phase out credits for solar and wind projects.
Corporate Standouts
Jabil Inc., an electronics manufacturing firm, bucked the trend, rising 10.8% after beating earnings estimates.
CEO Mike Dastoor credited strong demand in AI-related sectors for the company’s performance.
Fed on Hold, Eyes Forecasts
The Federal Reserve kicked off a two-day policy meeting Tuesday, with no interest rate change expected.
While inflation remains near the 2% target, the Fed is carefully watching how Trump’s trade tariffs will affect both growth and prices.
The focus is on Wednesday’s updated economic projections, which could signal future rate moves or revisions in growth expectations.
Bond Yields Ease
In the bond market, yields fell as investors weighed the weakening retail data and possible Fed caution:
- 10-year Treasury yield dropped from 4.46% to 4.42%
- 2-year yield dipped from 3.97% to 3.95%
Lower yields typically indicate increased demand for safe-haven assets amid uncertainty.
Global Markets Mixed
European markets declined, reflecting concerns over oil and global demand.
In Asia, Tokyo’s Nikkei 225 rose 0.6% after the Bank of Japan held interest rates steady, part of a slow unwinding of pandemic-era stimulus.
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