US stocks slumped Tuesday following signals that Israel's conflict with Iran may be worsening and that one of the US economy's main engines is weakening.
- The S&P 500 fell 50.39 points, or 0.8%, to 5,982.72.
- The Dow Jones Industrial Average fell 299.29 points, or 0.7%, to 42,215.80.
- The Nasdaq composite fell 180.12 points, or 0.9%, to 19,521.09.
Crude oil prices rose more than 4% on worries about damage to the flow of oil because of fighting between Israel and Iran, the
AP reports. The rise accelerated after President Trump
raised the temperature by calling for "UNCONDITIONAL SURRENDER!" and saying that "We are not going to" kill Iran's leader, "at least for now."
The fighting has the potential to drive up prices for crude oil and gasoline because Iran is a major producer of oil, and it sits on the narrow Strait of Hormuz, through which much of the world's crude passes. Often, higher oil prices can help stocks of companies in the solar industry because they increase the incentive to switch to alternative energy sources. But solar stocks tumbled Tuesday because of the possibility that Congress may phase out tax credits for solar, wind, and other alternatives energy sources. Enphase Energy dropped 24%, and First Solar fell 17.9%.
Treasury yields fell in the bond market after a report said shoppers spent less last month at US retailers than the month before and less than economists expected. Solid consumer spending has been one of the linchpins keeping the economy out of a recession, but part of May's drop may have simply been a return to more normal trends. In April, some shoppers had rushed to buy automobiles to get ahead of Trump's tariffs. "Today's data suggests consumers are downshifting, but they haven't yet slammed the brakes," according to Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management.
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On the winning side of Wall Street was Jabil, which jumped 8.9% after reporting a stronger profit for the latest quarter than analysts expected. CEO Mike Dastoor credited strength from accelerated demand related to artificial-intelligence technology, among other things. Verve Therapeutics soared 81.5% after Eli Lilly said it would buy the company developing genetic medicines for cardiovascular disease in a $1 billion deal that could be worth up to $1.3 billion if certain conditions are met. Lilly's stock slipped 2.1%.
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