Stocks slump and oil prices jump as Trump urges Iran's unconditional
surrender
[June 18, 2025] By
STAN CHOE
NEW YORK (AP) — U.S. stocks slumped on Tuesday under the weight of
another jump for the price of oil. It was a return to form for financial
markets after Wall Street’s worries about Israel’s fighting with Iran
had seemed to calm a bit on Monday.
The S&P 500 fell 0.8% following signals that the Israel-Iran conflict
may be worsening and that one of the U.S. economy’s main engines is
weakening. The swing sent Wall Street’s main measure of health nearly
back to where it started the week.
The Dow Jones Industrial Average dropped 299 points, or 0.7%, and the
Nasdaq composite fell 0.9%.
Stocks sank under increasing pressure from crude oil prices, which
climbed in their latest see-saw move. A barrel of benchmark U.S. crude
jumped 4.3% to $74.84. Brent crude, the international standard, added
4.4% to $76.45 per barrel.
Their gains accelerated after President Donald Trump raised the
temperature on Israel’s fight with Iran by calling for “UNCONDITIONAL
SURRENDER!” on his social media platform and saying, “We are not going
to” kill Iran’s leader, “at least for now.”
Before that, Trump had left a Group of Seven summit early and warned
that people in Iran’s capital should evacuate immediately. It took only
about eight hours for Trump to go from suggesting a nuclear deal with
Iran remained “achievable” to urging Tehran’s 9.5 million residents to
flee for their lives.
The fighting has the potential to drive up prices for crude oil and
gasoline because Iran is a major producer of oil, and it sits on the
narrow Strait of Hormuz, through which much of the world’s crude passes.
Past conflicts in the area have caused spikes in oil prices, though
they’ve historically proven to be only temporary after showing that they
did not disrupt the flow of oil.
Often, higher oil prices can help stocks of companies in the solar
industry because they increase the incentive to switch to alternative
energy sources. But solar stocks tumbled Tuesday because of the
possibility that Congress may phase out tax credits for solar, wind and
other energy sources that produce fewer emissions that change the
Earth’s climate.
Enphase Energy dropped 24%, and First Solar fell 17.9%.
Treasury yields also fell in the bond market after a report said
shoppers spent less last month at U.S. retailers than the month before
and than economists expected. Solid such spending has been one of the
linchpins keeping the economy out of a recession, but part of May’s drop
may have simply been a return to more normal trends.
In April, some shoppers had rushed to buy automobiles to get ahead of
Trump’s tariffs.
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Traders Drew Cohen, left, and Joseph Lawler, center, work with
specialist Patrick King on the floor of the New York Stock Exchange,
Tuesday, June 10, 2025. (AP Photo/Richard Drew)
 “Today’s data suggests consumers are
downshifting, but they haven’t yet slammed the brakes,” according to
Ellen Zentner, chief economic strategist for Morgan Stanley Wealth
Management
On the winning side of Wall Street was Jabil, which jumped 8.9%
after reporting a stronger profit for the latest quarter than
analysts expected. CEO Mike Dastoor credited strength from
accelerated demand related to artificial-intelligence technology,
among other things.
Verve Therapeutics soared 81.5% after Eli Lilly said it would buy
the company developing genetic medicines for cardiovascular disease
in a $1 billion deal that could be worth up to $1.3 billion if
certain conditions are met. Lilly’s stock fell 2%.
All told, the S&P 500 lost 50.39 points to 5,982.72. The Dow Jones
Industrial Average dropped 299.29 to 42,215.80, and the Nasdaq
composite sank 180.12 to 19,521.09.
All the action took place as the Federal Reserve began a two-day
meeting on interest rates. The nearly unanimous expectation among
traders and economists is that the Fed will make no move.
The Fed has been hesitant to lower interest rates, and it’s been on
hold this year after cutting at the end of last year, because it’s
waiting to see how much Trump’s tariffs will hurt the economy and
raise inflation. Inflation has remained relatively tame recently,
and it’s near the Fed’s target of 2%.
More important for financial markets on Wednesday will likely be the
latest set of forecasts that Fed officials will publish for where
they see the economy and interest rates heading in upcoming years.
In the bond market, the yield on the 10-year Treasury eased to 4.38%
from 4.46% late Monday.
In stock markets abroad, indexes fell across much of Europe after
finishing mixed in Asia.
Tokyo’s Nikkei 225 index rose 0.6% after the Bank of Japan opted to
keep its key interest rate unchanged. It’s been gradually raising
its rate from near zero and cutting back on its purchases of
Japanese government bonds to help counter inflation.
___
AP Business Writer Elaine Kurtenbach contributed.
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