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US stock futures retreated on Tuesday amid dwindling hopes for a quick resolution to Israel-Iran hostilities, as President Trump played down the prospect of a truce and the two continued to trade strikes.
Dow Jones Industrial Average futures (YM=F) sank 0.7%, while those on the S&P 500 (ES=F) fell 0.6%. Contracts on the tech-heavy Nasdaq 100 (NQ=F) also stumbled 0.6%.
Overall, US stocks have so far proved resilient amid the conflict. The major gauges ended higher on Monday after a report that Iran is seeking a ceasefire and return to nuclear program negotiations.
But Trump's overnight call for the evacuation of Iran's capital city amid a spike in Israel-Iran tensions has spooked markets worried about the risk of a descent into full-on regional war. The president's early exit from the G7 summit is also spurring fears of an escalation.
Early on Tuesday, Trump rejected the idea he was workiing on a Middle East pause in strikes, as suggested by France's President Macron. It "certainly has nothing to do with a Cease Fire. Much bigger than that,” he posted on social media.
Later, Trump went on to say any push for a truce should come from Iran. "I have not reached out to Iran for “Peace Talks” in any way, shape, or form. ... If they want to talk, they know how to reach me," he wrote.
Oil prices jumped as investors weighed the remarks, with Brent futures (BZ=F) rising to over $74 a barrel and West Texas Intermediate (CL=F) crude not far below $73 a barrel.
At the same time, Wall Street is grappling with concerns over Trump's trade policy and the direction of US interest rates.
As the deadline for instituting the most sweeping US tariffs approaches, officials have been talking to trading partners at the G7 summit in pursuit of deals. The first completed deal emerged Monday, as Trump and British Prime Minister Keir Starmer said they had signed the trade agreement they had landed on last month.
Read more: The latest on Trump's tariffs
Even with the tariff pause in place as negotiations take shape, however, Trump's trade policy has rattled retail sales and consumer confidence. On Tuesday, Investors will get fresh insight into how retail is faring amid tariff uncertainty with the May retail sales report, which is due for release at 8:30 a.m. ET.
Meanwhile, the Federal Reserve is set to issue its next decision on interest rates on Wednesday. A consistent refrain from policymakers this year has been that tariffs represent a stumbling block in terms of issuing interest rate cuts due to the potential for an uptick in inflation. New signs of cooling inflation, consequently, aren't expected to convince the central bank to change directions; policymakers are expected to hold rates steady Wednesday.
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Solar stocks tumble after Senate changes to Trump's tax megabill
US solar stocks have tumbled after a Senate panel released proposals for an early and full phase-out of solar and wind energy tax credits on Monday.
The plan to remove credits by 2028 are among the several changes put forward by a Republican-controlled panel to President Trump's "big beautiful" tax and spending bill.
Shares of Enphase Energy (ENPH), which makes solar inverters, dropped 17% before the bell.
Meanwhile, solar panel seller Sunrun (RUN) tumbled 26%, while its peer SolarEdge Technologies (SEDG) sank more than 20%. First Solar (FSLR) pulled back 11%.
Gold prices continue to rise as investors seek safe-havens
Gold (GC=F) prices rose higher Monday night as the ongoing Israel-Iran conflict pushed risk-averse investors into safer positions, such as gold as a haven asset.
Bloomberg reports:
