U.S. Stocks Fall as Iran Strikes Resume and Oil Prices Rise

Brent crude jumped more than 5 percent to crest $80 a barrel. The Dow fell 1.09 percent, or 500 points, at the close. The S&P 500 posted a small loss while the tech-heavy Nasdaq rose slightly.

Global stocks also declined earlier in the day.

The UK’s FTSE 100 fell 1 percent and Japan’s Nikkei dropped 2.1 percent. He criticized Iran’s leadership, calling them “sick people,” and said he was “very upset” with the country’s military alliance with Spain. “As far as I’m concerned, it’s over,” Trump said, though he added that U.S. negotiators wanted to continue talks.

The International Monetary Fund lowered its global economic growth forecast to 3 percent, down from 3.1 percent in April, citing Middle East conflict and pressurized AI spending. U.S. gas prices at the pump averaged $3.79 per gallon, $0.65 higher than a year ago, according to AAA.

US diesel futures rose 13 percent after Russia implemented a diesel export ban following a Ukrainian drone strike on refineries. Minutes from the Federal Reserve’s last board meeting showed officials saw little near-term discussion of lowering interest rates.

Some indicated rates may need to rise before year-end. “Both total and core inflation were higher than their levels a year earlier, a development that the staff attributed to a variety of factors, including the pass-through of past tariff increases, higher energy and input costs stemming from the conflict in the Middle East, and the surge in demand related to the AI buildout,” the minutes said.

The current target range for the federal funds rate stands at 3.5 percent to 3.75 percent. Annualized U.S. inflation reached 4.2 percent in May, a three-year high. Global growth averaged 3.5 percent in 2024 and 2025.