Geopolitical tensions are boiling over. President Trump has issued a stark warning regarding Iran, asserting that the U.S. commands “utter control over the skies” in the region, adding, “Nobody does it better than the good ol’ USA.” He has now ratcheted up his warning, calling for the Iranian leadership’s “unconditional surrender.” In response to this escalating situation, the markets are feeling the squeeze, with the SPY ETF now down 0.39%.
Homebuilders are grappling with dwindling confidence, as sentiment plunged to a multi-year low in June, echoing levels last seen in 2022. The National Association of Home Builders/Wells Fargo Housing Market Index edged down by 2 points to a reading of 32, a figure that fell short of predictions for an uptick. Faced with cautious consumers sidelined by the uncertain economic climate, construction firms have increasingly turned to price cuts in a bid to spark demand. While sales conditions, future expectations and buyer foot traffic all registered declines, optimism emerged in the Northeast region, where sales managed a modest rise.
Homebuilder stock Toll Brothers (NYSE: TOL) is down 1.2%, while the SPY ETF is now down 0.29%.
Retail sales took an unexpected tumble last month, dropping a steeper-than-anticipated 0.9%. This downturn, fueled partly by sliding gasoline sales and a generally cloudier economic outlook, exceeded economists’ predictions for a more modest 0.6% decline. Still, not all corners of the retail sector felt the pinch; auto dealerships and building material suppliers managed to find pockets of strength.
The markets are staging an impressive turnaround, with all three of the major stock market indices trimming their losses this morning. The SPY ETF is currently down 0.20%.
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The market’s optimism for an easing of Middle East tensions faded overnight, sending stocks lower early on as conditions for a deal took a turn for the worse. After issuing a warning to flee Tehran, President Trump said he is seeking a “real end” to the conflict between Israel and Iran. This morning, each of the major stock market averages came out of the gate lower but are quickly narrowing their losses, including the SPDR S&P 500 ETF (SPY), which is down 0.20%.
Small-cap stocks are defying the broader downtrend, as reflected by a 1.1% jump in the Russell 2000 index. Meanwhile, volatility is on the rise, pushing the VIX index up approximately 4%.
Today marks the kickoff of the Federal Open Market Committee’s (FOMC) two-day meeting, where the fate of interest rates will be decided. Economists largely anticipate the Federal Reserve will hold rates steady, even as President Trump continues his push for a rate cut. Market participants are awaiting any signals from Fed Chairman Jerome Powell on the future direction of the economy, as well as any potential headwinds he might see.
All of the Magnificent Seven stocks came out of the gate under pressure. On the brighter side for chip-stock bulls, Wall Street firm Barclays has adopted an increasingly bullish stance on AI leader Nvidia (Nasdaq: NVDA | NVDA Price Prediction), raising its price target on the stock by $30 to $200 per share and reaffirming an “overweight” rating.
The major indices are off their worst levels of the session but remain lower:
Dow Jones Industrial Average: Down 79.41 (-0.19%)
Nasdaq Composite: Down 63.13 (-0.32%)
S&P 500: Down 14.22 (-0.22%)
In company news, Jabil (NYSE: JBL) is surging 10% today, propelled by an upbeat forecast driven by robust data center demand.
Mettler-Toledo (NYSE: MTD), a firm specializing in precision instruments, is seeing its shares fall by 1.9%.
Texas Pacific Land (NYSE: TPL), a dividend-paying U.S. landowner with significant holdings in the Permian Basin, is tacking on a 2.1% gain today.
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Gerelyn Terzo is the author of dividend investing handbook "Dividend Investing Strategies: How to Have Your Cake & Eat It Too." A veteran financial journalist, she covers agri-finance for outlets like Global AgInvesting and the broader stock market and personal finance for 24/7 Wall Street. She began at CNBC and later helped launch Fox Business in New York. Gerelyn currently resides in Woodland Park, Colorado and dabbles in nature photography as a hobby.
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