The Dow Jones Industrial Average fell by 0.70%, the Nasdaq dropped 0.91%, and the S&P 500 decreased 0.84% as trading concluded.
Investors “remain uncertain whether the situation between Israel and Iran is set to escalate or resolve,” stated Art Hogan of B. Riley Wealth Management.
Donald Trump announced that the U.S. would not target the Iranian leader “for now,” seemingly demanding an Iranian surrender on the fifth day of the military confrontation between Israel and Iran, initiated by the Israelis.
Prior to a Security Council meeting, Trump wrote “unconditional surrender” on his social network.
Stock traders are particularly mindful of developments in the Middle East due to its significance in the global oil market.
“Iran produces about three million barrels of oil per day,” Hogan noted.
“Should the situation worsen and this supply be removed from the global market, we would likely see a significant spike in oil prices, posing an economic brake for all,” he added.
Iran controls the Strait of Hormuz, through which 20% of the world’s oil passes.
On Wall Street, investors were also somewhat dampened by a larger-than-expected decline in U.S. retail sales in May.
The most affected sectors included automobiles, construction, and hospitality.
According to Michael Pearce of Oxford Economics, “tariff announcements have impacted the planning of major expenses,” which had fueled consumption in April.
Additionally, industrial production contracted more than expected in May, by 0.2%, as reported today.
“The combination of negative economic data and an increasingly complicated international situation has prompted market operators to adopt a risk-reduction stance,” indicated Jose Torres of Interactive Brokers.
