U.S. stocks slipped and oil prices rallied, after hopes for a quick resolution to the Israel-Iran conflict dimmed and the U.S. expanded its military footprint in the region.
President Trump warned he is losing patience with Iran, calling for unconditional surrender and saying he wouldn’t target the country’s leader “for now.” Trump said earlier he was working on a “real end” to the conflict, after signing a G-7 statement calling for peace and stability in the Middle East.
Iran has signaled it wishes to de-escalate hostilities with Israel, according to a Wall Street Journal report that boosted stocks Monday. But the two countries continued to trade missile strikes Tuesday. A third U.S. Navy destroyer entered the eastern Mediterranean Sea to help defend Israel, and a second U.S. carrier strike group is heading toward the Arabian Sea.
Trump left the G-7 summit in Canada a day early to focus on the Middle East crisis, abandoning several conversations on trade aimed at easing tensions over tariffs and other issues. After his meeting with Canadian Prime Minister Mark Carney, Canada’s government said the two leaders had agreed to work toward a deal within 30 days. The two sides are expected to meet later this week.
Meantime, new data Tuesday showed U.S. retail sales declined more than expected last month, shrinking 0.9% from April, or 0.3% if vehicle sales are excluded.
In recent trading:
Stocks fell. The Dow industrials, S&P 500 and Nasdaq Composite dropped as much as 0.9%.
Solar stocks such as SunRun slid after Senate Republicans maintained a full phase-out of solar and wind-energy tax credits in Trump’s budget bill.
Energy prices rallied. Brent crude futures, the international oil benchmark, rose about 4.4%.
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