U.S. Stocks Decline Amid Ongoing Middle East Conflict

By Caroline Valetkevitch

NEW YORK (Reuters) – U.S. stocks were lower on Tuesday, with indexes adding to losses in afternoon trading as the Israel-Iran conflict continued for a fifth day, coupled with the U.S. military’s deployment of fighter jets to the region.

According to Reuters, U.S. military sources indicated that more fighter aircraft are being sent to the Middle East, and other warplanes’ deployments have been extended. President Donald Trump remarked that U.S. patience is wearing thin, though there’s currently no intention to remove Iran’s leader.

Iran’s semi-official Mehr news agency reported that a senior army commander urged Israelis to evacuate Haifa and Tel Aviv. The conflict escalated when Israel attacked Iran’s nuclear facilities last Friday.

Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis, noted, “We’re in a period where visibility is not great, uncertainty is high, and the wall of worry is under construction.”

Beyond the Middle East situation, investors are keenly observing updates on Trump’s tariffs, tax-cut bill, and U.S. interest rates. The Federal Reserve is anticipated to announce a monetary policy decision on Wednesday, likely keeping rates unchanged.

Most S&P 500 sectors declined except for energy, which rose by 1.7%, boosted by Exxon Mobil’s 2% increase. Concerns linger over potential oil export bottlenecks from the Middle East due to the conflict.

The Dow Jones Industrial Average fell 323.28 points, or 0.76%, to 42,191.81. The S&P 500 dropped 51.45 points, or 0.85%, to 5,981.53, while the Nasdaq Composite lost 189.33 points, or 0.96%, to 19,511.89.

Solar stocks suffered a setback following proposed changes to Trump’s tax-cut bill revealed by Senate Republicans that could phase out solar, wind, and energy tax credits by 2028. Enphase Energy shares plummeted 23.2%, while Sunrun suffered a 39.4% decline.

Eli Lilly eased 1.6% after agreeing to acquire Verve Therapeutics for up to $1.3 billion, leading to a 79% surge in Verve’s shares.

Earlier data indicated a larger-than-expected drop in U.S. retail sales in May, while factory production saw minimal growth.

On the NYSE, declining stocks outnumbered advancers by a 2.04-to-1 ratio, with 76 new highs and 65 new lows. On the Nasdaq, 1,369 stocks advanced, while 3,013 declined, marking a 2.2-to-1 ratio of declining to advancing issues.

(Additional Reporting by Kanchana Chakravarty and Sukriti Gupta in Bengaluru; Editing by Maju Samuel)