Indexes fall as conflict between Israel and Iran intensifies

NEW YORK: US stocks were lower on Tuesday, with indexes adding to losses in afternoon trading as the Israel-Iran conflict raged on for a fifth day, with the US military moving fighter jets to the Middle East.

Reuters reported, citing three US officials, that the US military is deploying more fighter aircraft to the Middle East and extending the deployment of other warplanes.

President Donald Trump said that US patience was wearing thin but it had no immediate intention to “take out” Iran’s leader.

In addition, Iran’s semi-official Mehr news agency said Iran’s senior army commander called on Israelis to evacuate Haifa and Tel Aviv immediately.

The war began on Friday when Israel attacked Iran’s nuclear facilities.

“We’re in a period where visibility is not great, uncertainty is high, and the wall of worry is under construction,” said Terry Sandven, chief equity strategist at US Bank Wealth Management in Minneapolis, Minnesota.

Besides the Middle East conflict, investors are closely watching for any new information on Trump’s tariffs, his tax-cut bill and on US interest rates.

The Federal Reserve is expected to announce a monetary policy decision on Wednesday, although policymakers are expected to leave rates unchanged.

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All of the major S&P 500 sectors were lower except for energy .SPNY, which was up 1.7%, while shares of Exxon Mobil XOM.Nwere up 2%. Investors have worried that the conflict could create bottlenecks for oil exports from the oil-rich Middle East.

The Dow Jones Industrial Average .DJI fell 323.28 points, or 0.76%, to 42,191.81, the S&P 500 .SPX lost 51.45 points, or 0.85%, to 5,981.53 and the Nasdaq Composite .IXIC lost 189.33 points, or 0.96%, to 19,511.89.

Among declining stocks, solar stocks fell after US Senate Republicans late on Monday unveiled proposed changes to Trump’s tax-cut bill, including a phase-out of solar, wind and energy tax credits by 2028.

Shares of Enphase Energy ENPH.O dropped 23.2% and Sunrun RUN.O fell 39.4%.

Eli Lilly LLY.N eased 1.6% after it agreed to acquire Verve Therapeutics VERV.O for up to $1.3 billion. Shares of Verve surged 79%.

Earlier Tuesday, data showed US retail sales dropped more than expected in May, while factory production barely rose last month.

Declining issues outnumbered advancers by a 2.04-to-1 ratio on the NYSE. There were 76 new highs and 65 new lows on the NYSE.

On the Nasdaq, 1,369 stocks rose and 3,013 fell as declining issues outnumbered advancers by a 2.2-to-1 ratio.