Israel-Iran Tensions Weigh on Markets

At Tuesday’s (today’s) opening, the Dow Jones Industrial Average started the day with a loss of over 100 points; the S&P 500 fell by 0.3% and the Nasdaq dropped by 0.5%.

One of the main reasons for this decline was the weakening expectations of a quick end to the conflict. US President Donald Trump’s remarks and social media posts on the matter overshadowed the possibility of a swift ceasefire in the region.

Trump said in a post on his social media Truth Social:

“French President Emmanuel Macron mistakenly claimed that I left the G7 Summit early and returned to Washington to work on a ceasefire between Israel and Iran. Wrong! This has nothing to do with a ceasefire. Macron got it wrong, as usual.”

Following these statements, markets reacted quickly. Oil prices rose by 2%, while cryptocurrencies lost value. Bitcoin (BTC) price dropped from $108,000 to around $105,500.

Despite missile attacks last week, US stock markets showed resilience, but now are signaling weakness this week. Especially the S&P 500 managed to stay above the 6,000 point level after the rise on June 16.

US Retail Sales Fall Below Expectations

Negative signals are also evident in economic data. According to the latest figures released on June 17, US retail sales declined by 0.9% in May. This drop exceeded analysts’ expectations of a 0.6% decrease and indicated a slowdown in consumer spending.

Eyes on the FED Meeting

Meanwhile, the US Federal Reserve (Fed) started its two-day monetary policy meeting on Tuesday. Markets focused on the FOMC statement to be announced on Wednesday, June 18, and remarks by Fed Chair Jerome Powell. Analysts generally expect the Fed to keep interest rates steady at this meeting.

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