Dow, S&P 500, Nasdaq fall after Trump rejects Israel-Iran truce

• Trump impacts market with speech on Israel and Iran
• Dow, S&P 500 and Nasdaq post significant decline
• Investors await Fed interest rate decision

Major U.S. stock indexes fell on Tuesday, reflecting rising geopolitical tensions in the Middle East. Statements by former President Donald Trump, who rejected the possibility of a ceasefire between Israel and Iran, reinforced the climate of uncertainty in the financial markets.

The Dow Jones Industrial Average fell about 0,4%, while the S&P 500 dropped about 0,3%. The Nasdaq Composite, which is heavily weighted toward technology companies, also lost 0,3%.

In the previous session, indexes had closed higher after a report suggested Iran was seeking a ceasefire and a return to negotiations over its nuclear program. However, Trump's comments overnight changed investors' mood. He called for the evacuation of the Iranian capital, raising fears of a military escalation in the region.

On Tuesday morning, Trump doubled down on his stance by saying he was not seeking a truce, contradicting French President Emmanuel Macron. “It certainly has nothing to do with a ceasefire. Much bigger than that,” Trump posted on social media. In a statement to reporters aboard Air Force One, he added: “An end. A real end, not a ceasefire, an end.” The former president did not offer further details on possible next steps.

The oil market reacted quickly to the deteriorating geopolitical situation. Brent futures rose almost 2% to near $75 per barrel, while West Texas Intermediate was close to $73.

In addition to tensions in the Middle East, Wall Street is also keeping an eye on US trade policy and the direction of interest rates. With the end of the tariff suspension implemented by Trump approaching, the US government is seeking to close new trade agreements, such as the pact recently signed with the United Kingdom.

Another cause for concern is the performance of the domestic economy. US retail sales fell 0,9% in May, exceeding the most pessimistic projections. This data reinforces market expectations regarding the Federal Reserve meeting, which began this Tuesday. The decision on interest rates is scheduled for Wednesday, and investors are looking for signs of possible cuts later this year.