U.S. Stocks Slide Sharply Amid Escalating Israel-Iran Conflict
(MENAFN) US equity markets closed sharply lower Tuesday as the ongoing Israel-Iran conflict extended into its fifth day, marked by escalating attacks from both nations and a stark warning from President Donald Trump aimed at Iran’s Supreme Leader.
The Dow Jones Industrial Average tumbled 0.7%, shedding 299.29 points to finish at 42,215.8. Meanwhile, the tech-heavy Nasdaq Composite declined 0.91%, ending at 19,521.09, and the S&P 500 dropped 0.84%, closing at 5,982.72.
Since last Friday, hostilities in the Middle East have intensified following Israeli airstrikes targeting several Iranian sites, including military and nuclear installations. Tehran responded with retaliatory missile launches.
Official reports from Israel indicate that Iranian missile attacks have resulted in at least 24 fatalities and hundreds of injuries. Conversely, Iran states that over 224 people have died and upwards of 1,000 were wounded in Israeli strikes.
In a forceful message Tuesday, President Trump asserted that the United States has precise knowledge of Iranian Supreme Leader Ayatollah Ali Khamenei’s location, adding that he is safe “for now” but cautioning that “our patience is wearing thin.”
“We know exactly where the so-called 'Supreme Leader' is hiding. He is an easy target, but is safe there - We are not going to take him out (kill!), at least not for now,” Trump declared in a social media post. “But we don’t want missiles shot at civilians, or American soldiers. Our patience is wearing thin. Thank you for your attention to this matter!”
He further emphasized his stance with a follow-up tweet stating, “UNCONDITIONAL SURRENDER!”
Amid growing fears over oil supply disruptions and concerns that Middle Eastern tensions could persist, global markets faced significant volatility. This unease was echoed in European stock exchanges.
Although Brent crude initially dipped following Israel’s attacks, it rebounded and surged 4.55% to $75.42 per barrel by 4:20 pm local time (2040 GMT), fueled by Trump’s comments and ongoing missile strikes.
Beyond geopolitical turmoil, investors are gearing up for the Federal Reserve’s interest rate announcement on Wednesday, with expectations firmly set for the benchmark rate to remain unchanged.
Economic indicators also painted a cautious picture: US retail sales for May dropped 0.9% month-over-month, missing forecasts, while industrial production declined by 0.2%, also falling short of expectations.
Reflecting rising anxiety, the VIX Index — often dubbed the “fear index” — jumped 13.03%, closing at 21.60.
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