U.S. Stocks Drop Amid Middle East Tensions, Weak Data

U.S. stock markets fell sharply amid escalating geopolitical tensions surrounding a potential U.S. strike on Iran, following President Trump’s increasingly aggressive rhetoric and recent departure from the G7 summit. The Dow Jones dropped nearly 300 points, the S&P 500 fell below 6,000, and the Nasdaq declined over 0.9%, with energy stocks being the only sector to gain due to rising oil prices. Trump called for Iran’s "unconditional surrender" and threatened its leader, signaling a possible military escalation that has heightened investor anxiety about prolonged instability in the Middle East. Concurrently, disappointing U.S. retail sales and weaker manufacturing data added downward pressure, while uncertainty looms over the Federal Reserve's upcoming decision on interest rates, with expectations for the central bank to maintain current levels despite Trump’s calls for cuts. The combination of geopolitical risk and economic concerns has led investors to seek safe-haven assets like bonds and the dollar. Market volatility, driven previously by tariffs, is now increasingly influenced by the potential for U.S. military involvement in the Middle East conflict, which could have broad negative repercussions across sectors beyond energy.