Stock Market News Review: SPY, QQQ Sink amid Israel-Iran Escalation, Weak Retail Sales Data
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The SPX and NDX opened the trading session lower after May's retail sales data showed a 0.9% month-over-month (MoM) fall, lower than the estimate for a 0.6% drop. Core retail sales, which exclude volatile items like gas, cars, and building materials, rose by 0.4% MoM, ahead of the estimate for a 0.3% rise.
The lower opening comes despite the U.S. and UK finalizing their trade deal reached last month. Under the deal, tariffs on the first 100,000 UK vehicles imported to the U.S. will be set at 10%, down from 27.5%, while the U.S. baseline tariff on imported UK goods will remain in place. In the meantime, both sides will continue to negotiate steel, aluminum, and pharmaceutical tariffs. The market's muted reaction to the signed deal is likely due to the fact that it contained no new material developments compared to the initial deal.
Meanwhile, sentiment among single-family homebuilders is on the decline. June's Housing Market Index (HMI) tallied in at 32, the lowest reading since December 2022 and below the estimate for 36. A reading above 50 signals that most surveyed homebuilders feel confident about the current and near-term housing landscape.
The main market catalyst in the short-term remains the Israel-Iran conflict. In a Truth Social post, Trump demanded ' UNCONDITIONAL SURRENDER ' from Iran and said that the U.S. knows where Supreme Leader Ayatollah Ali Khamenei is hiding but will refrain from targeting him.
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They and other Israelis were horrified by the recent release of videos showing emaciated hostages speaking under duress and pleading for help and food. The families and supporters have pressed the government for a deal to stop the war — a call that some former Israeli army and intelligence chiefs have made as well in recent weeks. A group representing the families has urged Israelis into the streets on Sunday. "Across the country, hundreds of citizen-led initiatives will pause daily life and join the most just and moral struggle: the struggle to bring all 50 hostages home," it said in a statement. "I want to believe that there is hope, and it will not come from above, it will come only from us," said Dana Silberman Sitton, sister of Shiri Bibas and aunt of Kfir and Ariel Bibas, who were killed in captivity. She spoke at a weekly rally in Tel Aviv, along with Pushpa Joshi, sister of kidnapped Nepalese hostage Bipin Joshi, a student seized from a kibbutz. 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Protestors go on strike in Israel demanding ceasefire and hostage releases
Protestors go on strike in Israel demanding ceasefire and hostage releases JERUSALEM (AP) — Police in Israel made more than two dozen arrests on Sunday for 'disruption of order' as families of hostages held in Gaza step up their campaign with a nationwide strike. Police said that most of the protests had not been disruptive, but acknowledged several exceptions and said they 'will act firmly against anyone who violates the law or endangers public order.' The arrests come as some businesses, theaters and restaurants close in solidarity and Israel's leaders plan a new offensive into Gaza City. THIS IS A BREAKING NEWS UPDATE. AP's earlier story follows below. JERUSALEM (AP) — Protestors in Israel demanding their government make a deal to secure the release of hostages held by militants in Gaza escalated their campaign on Sunday, staging a strike that snarled traffic and shuttered businesses. The action organized by the Hostages and Missing Families Forum marked a fresh push, weeks after militant groups released videos of hostages and Israel signaled plans for a new Gaza offensive. Protesters fear further fighting could endanger the 50 hostages believed to remain in Gaza, only about 20 of whom are thought to be alive. They chanted, 'We don't win a war over the bodies of hostages' and demanded a deal. Netanyahu's allies oppose any deal that leaves Hamas in power 'Today, we stop everything to save and bring back the hostages and soldiers. Today, we stop everything to remember the supreme value of the sanctity of life,' said Anat Angrest, mother of hostage Matan Angrest. 'Today, we stop everything to join hands — right, left, center and everything in between.' Although Israel's largest labor union, Histadrut, ultimately did not join Sunday's action, strikes of this magnitude are relatively rare in Israel. Many businesses and municipalities decided independently to strike. Still, an end to the conflict does not appear near. Prime Minister Benjamin Netanyahu has demanded the immediate release of the hostages but is balancing competing pressures, haunted by the potential for mutiny within his coalition. Far-right members of his cabinet insist they won't support any deal that allows Hamas to retain power. The last time Israel agreed to a ceasefire that released hostages, they threatened to topple Netanyahu's government. Finance Minister Bezalel Smotrich on Sunday called the stoppage 'a bad and harmful campaign that plays into Hamas' hands, buries the hostages in the tunnels and attempts to get Israel to surrender to its enemies and jeopardize its security and future.' Israeli airstrike hits power plant in Yemen Israeli airstrikes hit Yemen's capital Sunday, escalating strikes on Iran-backed Houthis, who since the war began have fired missiles at Israel and targeted ships in the Red Sea. Both the IDF and a Houthi-run television station in Yemen announced the strikes. Al-Masirah Television said they targeted a power plant in the southern district of Sanhan, sparking a fire and knocking it out of service, the Yemeni station said. Israel's military said Sunday's strikes targeted energy infrastructure it claimed was being used by the Houthis, and were launched in response to missiles and drones aimed at Israel. While some projectiles have breached its missile defenses — notably during its war with Iran in June — Israel has intercepted the vast majority of missiles launched from Yemen. More tents sent to Gaza ahead of new displacement order While demonstrators in Israel demanded a ceasefire, Israel began preparing for an invasion of Gaza City and other populated parts of the besieged strip, aimed at destroying Hamas. The military body that coordinates its humanitarian aid to Gaza said Sunday that the supply of tents to the territory would resume. COGAT said it would allow the United Nations to resume importing tents and shelter equipment into Gaza ahead of plans to forcibly evacuate peopel from combat zones 'for their protection.' Tents and the majority of assistance has been blocked from entering Gaza since Israel imposed a total blockade in March after a ceasefire collapsed. Deliveries have since partially resumed, though aid organizations say the flow is far below what is needed. Some have accused Israel of 'weaponizing aid' through blockades and rules they say turn humanitarian assistance into a tool of its political and military goals. Israel's air and ground war has already killed tens of thousands of people in Gaza and displaced most of the population. The United Nations is warning that levels of starvation and malnutrition in Gaza are at their highest since the war began. The Hamas-led attack in 2023 killed around 1,200 people in Israel. Israel's retaliatory offensive has killed 61,897 people in Gaza, according to the Health Ministry, which does not specify how many were fighters or civilians but says around half were women and children. The ministry is part of the Hamas-run government and staffed by medical professionals. The U.N. and independent experts consider it the most reliable source on casualties. Israel disputes its figures but has not provided its own. ___ Melzer reported from Nahariya, Israel. AP writer Samy Magdy contributed from Cairo. ___ Follow AP's war coverage at Sam Metz And Natalie Melzer, The Associated Press
