Stocks fall as Israel-Iran war ramps up and consumers pull back on spending
Stocks on Wall Street slid early Tuesday as investors reacted to the intensifying war between Israel and Iran and disappointing retail sales data — stoking fresh concerns about global stability and the strength of consumer demand.The Dow Jones Industrial Average fell 149.25 points, or 0.35%, to 42,365.84 by mid-morning.The S&P 500 declined 23.98 points, or 0.40%, to 6,009.13, while the tech-heavy Nasdaq shed 87.46 points, or 0.44%, to 19,613.75.The pullback came as traders assessed the growing possibility of a broader conflict in the Middle East and weighed the impact of softer-than-expected US retail figures released earlier in the day.Retail sales dropped 0.9% in May, falling short of economists’ forecasts and signaling that consumers may be pulling back amid lingering inflation and economic uncertainty, according to fresh data released by the Commerce Department.Weakness in key categories such as autos, gas, and building materials contributed to the slump, offsetting modest gains in online shopping and miscellaneous retail.Despite the broader market weakness, small-cap stocks saw a boost, with the Russell 2000 rising 23.62 points, or 1.12%, to 2,124.13.
The index, which often reflects domestic economic sentiment, appeared to buck the trend of larger indexes in early trading.Meanwhile, the CBOE Volatility Index (VIX) — Wall Street’s “fear gauge” — jumped 4.08% to 19.89, reflecting heightened investor anxiety as the Israel-Iran conflict escalates and market sentiment becomes more fragile.The combination of international turmoil and soft economic data has raised fresh doubts about the Federal Reserve’s next steps.While inflation has moderated in recent months, the central bank remains cautious amid signs of consumer weakness and geopolitical volatility.Traders will be closely watching for additional commentary from Fed officials and upcoming economic indicators for clues about potential rate adjustments heading into the second half of the year....