Wall Street Slips as Oil Prices Rise Again and Consumer Spending Slows

NEW YORK — U.S. stocks inched lower Tuesday morning, with investors weighing renewed tensions in the Middle East, rising oil prices, and fresh signs that American consumers may finally be pulling back.

The S&P 500 dipped 0.3%, the Dow Jones Industrial Average slipped 89 points (0.2%), and the Nasdaq lost 0.4% as of 10 a.m. Eastern. Treasury yields also edged lower after new data showed U.S. retail sales fell more than expected in May.

Shoppers Are Pulling Back — But Not Slamming the Brakes

The retail sales report added to growing evidence that consumers, long the backbone of the U.S. economy, may be starting to cool off. After an unusually strong April, partly driven by auto purchases ahead of potential tariffs, May’s dip may signal a return to more normal spending patterns.

“Today’s data suggests consumers are downshifting, but they haven’t yet slammed the brakes,” said Ellen Zentner, chief economist at Morgan Stanley.

Geopolitical Tensions Send Oil Prices Climbing

Meanwhile, concerns over escalating conflict between Israel and Iran sent oil prices higher once again. President Trump—who abruptly left the G7 summit—warned Iranians to evacuate Tehran “immediately,” just hours after suggesting a nuclear deal was still possible.

Iran, a key oil producer, controls the Strait of Hormuz, a chokepoint for much of the world’s crude. That makes any hint of instability in the region a potential flashpoint for energy markets.

After calming on Monday, oil prices bounced back. U.S. benchmark crude rose 2.6% to $72.12 a barrel, while Brent crude climbed 2.8% to $75.28.

Solar Stocks Slammed Despite Rising Oil

You might expect rising oil prices to give renewable energy stocks a boost—but not this time. Shares of solar companies tumbled on fears that Congress may roll back tax credits for clean energy. Enphase Energy plunged 23.6%, and First Solar dropped 18.2%.

AI and Biotech Stand Out in a Mixed Market

Still, a few stocks shined. Jabil jumped 10.7% after reporting stronger-than-expected earnings, helped by increased demand tied to artificial intelligence.

Biotech also made headlines: Verve Therapeutics surged nearly 74% after Eli Lilly announced it would acquire the company—known for its genetic treatments for heart disease—in a deal that could top $1.3 billion. Shares of Eli Lilly dipped 1%.

All Eyes on the Fed

Markets are now looking ahead to the Federal Reserve’s two-day policy meeting. No interest rate move is expected, but investors will be watching closely for new economic forecasts and clues about the Fed’s next steps.

So far, the Fed has kept rates steady in 2025, waiting to assess the economic fallout from tariffs and inflation trends. With inflation still near the Fed’s 2% target, policymakers remain cautious.

The 10-year Treasury yield dipped to 4.43% from 4.46%, while the 2-year yield edged down to 3.96%.

Global Markets: Japan Steady, Europe Down

Overseas, Japan’s Nikkei 225 rose 0.6% after the Bank of Japan held its interest rate steady, continuing its slow unwind of pandemic-era stimulus. European markets, however, mostly fell in early trading.

Source: AP News – US stocks edge lower as oil prices return to rising