S&P 500 Declines as Trump Appears Increasingly Hawkish on Iran

Published: June 17, 2025 by Omor IE

Key Points

Recent posts by Trump on Truth Social suggest he may be more hawkish on Iran than previously thought.
This reduces the chances of a quick ceasefire in the Middle East.
Macro figures coming in today are also slightly bearish.
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Stocks rallied across the board yesterday due to investors seeing the new Middle East conflict as more “contained” compared to expectations. Fears about Iran striking oil facilities and U.S. bases across the Middle East and closing the Strait of Hormuz haven’t yet materialized. Plus, there were multiple reports of Iran reaching out through third countries for continued negotiations. The market took these reports positively, and crude oil futures declined.

Today, that positivity seems to be waning. That’s primarily due to President Donald Trump making hawkish comments recently. He recently posted on Truth Social that he has “not reached out to Iran for ‘Peace Talks’ in any way, shape, or form.” He called it “HIGHLY FABRICATED, FAKE NEWS!”

Before that post, he posted “Everyone should immediately evacuate Tehran!” after saying that Iran should have signed the deal he offered. There have been reports of him leaving the G7 meeting early to focus on the Middle East.

Here’s a market update as of 11:00 AM (ET) today.

The S&P 500 is down 21.73 points, or 0.36%.
The Nasdaq Composite is down 88.74 points, or 0.45%.
The Dow Jones Industrial Average is down 86.1 points, or 0.2%.

All Eyes On the Iran-Israel Conflict

Chances are dimming for an early resolution of the conflict between the two countries after Trump’s comments. Israel has assassinated the new Iranian Chief of Staff, a replacement for the previous Chief of Staff, who was assassinated in the initial attack. There have been indications that Iranian missile attacks are also waning, with dozens of missiles being launched, compared to hundreds earlier.

In the meantime, the U.S. has re-shuffled military equipment and has sent tankers to Europe, possibly headed to the Middle East. This increases the chances that the U.S. may join Israel. Markets are pricing in a 60% chance of U.S. military action against Iran before July.

Macros

U.S. Industrial Production month-over-month came in at -0.2% vs. the 0% forecast. Slightly bearish, but this does reinforce a September rate cut.
U.S. Industrial Output year-over-year came in at 0.6%.
U.S. Manufacturing Output month-over-month came in at 0.1% and met the forecast.
U.S. Retail Sales month-over-month came in at -0.9% vs. the -0.6% forecast.
U.S. Import Prices month-over-month came in at 0% vs. the -0.2% forecast.
U.S. Export Prices month-over-month came in at -0.9% vs. the -0.2% forecast.
U.S. Core Retail Sales month-over-month came in at -0.3% vs. the 0.2% forecast.
U.S. NAHB Housing Market Index at 32 vs. the 36 forecast.
U.S. Business Inventories month-over-month came in at 0% and met the forecast.

Other Assets

Gold Futures are down 0.4% to $3,402.
Crude Oil Futures are up 2.8% to $72.2. This is mainly due to the situation in the Middle East appearing to get worse.
Natural Gas Futures are up 3.1% to $3.86.
Bitcoin is down 1.8% to $104,912.