Overnight – Stocks fall on the possibility America joins the fight in middle east
Stocks dropped overnight as investors digested weak retail sales data as well as the possibility that the US may join the escalating Israel-Iran conflict
President Trump is reportedly considering a range of responses, including potential U.S. military strikes against Iran, as tensions escalate in the Israel-Iran conflict. After a high-level meeting with advisers, Trump publicly demanded Iran’s “unconditional surrender” and claimed U.S. dominance over Iranian airspace, while emphasizing the superiority of American military equipment supplied to Israel. The U.S. has not directly entered the conflict but continues to support Israel, and Trump criticized Iran for rejecting previous nuclear agreements, reiterating his stance against Iranian uranium enrichment. Meanwhile, the G7 nations called for de-escalation but largely backed Israel, labeling Iran as a destabilizing force in the region.
On the economic front, the Federal Reserve began a two-day policy meeting, with expectations that interest rates will remain unchanged. Chair Jerome Powell’s comments are highly anticipated, especially as recent U.S. retail sales data showed a larger-than-expected decline, attributed in part to reduced motor vehicle purchases following tariff-related buying sprees. President Trump’s tariff policies have heightened concerns about global economic growth. In Asia, the Bank of Japan kept rates steady and announced plans to slow its bond purchase tapering in the next fiscal year.
In corporate news, Amazon announced an extension of its Prime Day event to four days, responding to customer demand for more shopping time. Verve Therapeutics saw its stock surge amid acquisition talks with Eli Lilly. Solar energy stocks fell sharply after the U.S. Senate revealed a phase-out of renewable energy tax credits by 2028, while nuclear energy companies like Oklo and Nano Nuclear Energy gained as credits for nuclear power were extended to 2036. Crude oil prices rose due to escalating Middle East tensions and a positive global growth outlook from the International Energy Agency, which forecasts oil demand peaking in 2029 before a slight decline, with global production capacity expected to increase through 2030.
ASX SPI 8529 (-0.01%)
The ASX is likely to be on tender hooks with all eyes on the Israel/Iran conflict and whether the US joins the conflict. This is a high possibility as the center piece of Trumps policy is lower oil prices to balance inflation from his Tariff policy, so expect the President to look for a quick solution.
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