Stock Market News Review: SPY, QQQ Sink amid Israel-Iran Escalation, Weak Retail Sales Data
Both the S&P 500 (SPX) and the Nasdaq 100 (NDX) closed in red territory as the Israel-Iran conflict drags into its fifth day. On Tuesday, President Trump convened a National Security Council meeting in order to discuss the turmoil. According to Axios, Trump is ' seriously considering ' launching an attack on Iran's nuclear facilities. The U.S. has also beefed up its defensive measures by sending planes and aircraft carriers to the Middle East.
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The SPX and NDX opened the trading session lower after May's retail sales data showed a 0.9% month-over-month (MoM) fall, lower than the estimate for a 0.6% drop. Core retail sales, which exclude volatile items like gas, cars, and building materials, rose by 0.4% MoM, ahead of the estimate for a 0.3% rise.
The lower opening comes despite the U.S. and UK finalizing their trade deal reached last month. Under the deal, tariffs on the first 100,000 UK vehicles imported to the U.S. will be set at 10%, down from 27.5%, while the U.S. baseline tariff on imported UK goods will remain in place. In the meantime, both sides will continue to negotiate steel, aluminum, and pharmaceutical tariffs. The market's muted reaction to the signed deal is likely due to the fact that it contained no new material developments compared to the initial deal.
Meanwhile, sentiment among single-family homebuilders is on the decline. June's Housing Market Index (HMI) tallied in at 32, the lowest reading since December 2022 and below the estimate for 36. A reading above 50 signals that most surveyed homebuilders feel confident about the current and near-term housing landscape.
The main market catalyst in the short-term remains the Israel-Iran conflict. In a Truth Social post, Trump demanded ' UNCONDITIONAL SURRENDER ' from Iran and said that the U.S. knows where Supreme Leader Ayatollah Ali Khamenei is hiding but will refrain from targeting him.
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