Stock market today: S&P 500 falls on reports US may join conflict against Iran

Investing.com-- The S&P 500 fell Tuesday as investors digested weak retail sales data as well as the ongoing Israel-Iran conflict looks set to escalate further amid reports the U.S.is mulling whether to join the war against Tehran.

At 4:00 p.m. ET (20:00 GMT), the Dow Jones Industrial Average fell 335 points, or 0.8%, the S&P 500 index dropped 0.8%, and the NASDAQ Composite 0.9%.

Trump mulling strikes against Iran in sign Israel-Iran conflict set to intensify

President Trump is mulling a various options, including a potential U.S. strike against Iran, after meeting with top advisers in the Situation Room at the White House on Tuesday, The Wall Street Journal reported Tuesday, citing unnamed administration officials said.

In a social media post Tuesday, U.S. President Donald Trump demanded that Iran agree to a "unconditional surrender," saying that "we now have complete and total control over the skies over Iran." The U.S. isn’t directly involved in the ongoing conflict but has supplied arms to Tel Aviv that Trump suggested has proved superior.

"Iran had good sky trackers and other defensive equipment, and plenty of it, but it doesn’t compare to American made, conceived, and manufactured ’stuff’," he added.

Trump also chided Iran for not accepting an earlier nuclear deal. Trump has repeatedly stated that Iran will not be allowed to enrich any uranium, despite Tehran’s claims that it has no plans to develop nuclear weaponry.

Trump departed the G7 gathering in Canada early, and in a social media post, said the departure had "nothing to do with a CeaseFire," adding that it was instead related to something "much bigger than that." He did not elaborate further.

Prior to Trump’s exit, the G7 nations had issued a statement calling for an easing to the conflict, but placed their support behind Israel and described Iran as a source of instability in the Middle East.

Fed starts policy-setting meeting

Beyond geopolitical tensions, the Federal Reserve has started a two-day meeting, that is widely expected to result in interest rates remaining unchanged at the conclusion of the meeting on Wednesday.

Comments from Chair Jerome Powell, on the path of interest rates, will be squarely in focus, amid signs of cooling inflation and some resilience in the economy.

That said, U.S. retail sales dropped more than expected in May, falling 0.9% last month after a downwardly revised 0.1% dip in April, weighed down by a decline in motor vehicle purchases as a rush to beat potential tariffs-related price hikes ebbed.

Economists polled by Reuters had forecast retail sales, which are mostly goods and are not adjusted for inflation, decreasing 0.7% after a previously reported 0.1% gain in April.

President Donald Trump’s sweeping tariffs have raised fears over global growth.

The Bank of Japan left interest rates unchanged as widely expected earlier Tuesday, and stated that it will reduce the pace at which it is tapering its monthly bond purchases from the next fiscal year.

Amazon extends Prime Day event

In the corporate sector, Amazon’s (NASDAQ:AMZN) annual Prime Day sales event is scheduled for July 8 through July 11, expanding to four days from two days compared to last year.

"We’re extending it to four days because our members have told us they just need more time to shop the deals," Jamil Ghani, Amazon’s vice president of worldwide prime said.

Additionally, Verve Therapeutics (NASDAQ:VERV) soared with Eli Lilly (NYSE:LLY) close to buying the biotech company for up to $1.3 billion.

Solar stocks Enphase Energy Inc (NASDAQ:ENPH), Sunrun (NASDAQ:RUN), First Solar (NASDAQ:FSLR) and SolarEdge Technologies (NASDAQ:SEDG) dropped sharply after the U.S. Senate’s changes to President Trump’s tax-cut bill revealed a phase-out of solar, wind and energy tax credits by 2028.

Oklo (NYSE:OKLO) and Nano Nuclear Energy (NASDAQ:NNE)(NASDAQ:NNE) both gained as nuclear power companies rose after the U.S. Senate extended credits for nuclear energy to 2036.

Crude jumps on geopolitical tensions, IEA report

Oil prices rose Tuesday, amid fading hopes for a sooner rather than Iran-Israel ceasefire as the conflict looks set to escalate. As well as the conflict, which threatens to disrupt Middle East supplies, the International Energy Agency’s positive outlook on global growth also lifted sentiment on oil prices.

Global oil demand will keep growing until around the end of this decade despite peaking in top importer China in 2027, as cheaper gasoline and slower electric vehicle adoption in the United States support consumption, the International Energy Agency said on Tuesday.

Oil demand will peak at 105.6 million barrels per day (bpd) by 2029 and then fall slightly in 2030, a table in the Paris-based IEA’s annual report shows. At the same time, global production capacity is forecast to rise by more than 5 million bpd to 114.7 million bpd by 2030.

Prices have been volatile Tuesday after Trump in a social media post urged "everyone" to evacuate Tehran.

Ambar Warrick contributed to this article