US stocks start lower amid heightened Middle East risks and weak retail sales

Retail sales drop far more than expected as oil prices jump over 2%

Sunrun, Enphase, etc. plummet on elimination of clean energy tax credits

On the 17th (local time), US stocks started lower due to weak retail sales data and heightened risks in the Middle East.

At 10:15 a.m. Eastern Standard Time, the S&P 500 was down 0.2% and the Nasdaq Composite was down 0.3%. The Dow Jones Industrial Average fell 0.1%.

International oil prices, which fell the previous day, turned upward again as risks in the Middle East escalated. Brent futures rose 2.1% to $74.90, and West Texas Intermediate (WTI) crude was up 2.2% at $71.74 a barrel.

The yield on the 10-year Treasury note fell 2 basis points (1bp=0.01%) to 4.434%, sending bond prices higher. The dollar moved little and gold prices fell 0.2% to $3,408 per ounce.

On this day, the Senate approved Trump's tax cut bill, and with the confirmation of the phased elimination of tax credits for clean energy companies such as solar, Sunrun and Enphase stocks plunged by more than 40% and 20%, respectively.

As expected, with the confirmation of the elimination of tax credits for electric vehicles, Tesla also fell 1.9%, and most EV makers were down.

Verve Therapeutics, a gene-editing biotech company that Eli Lilly and Company agreed to acquire for $1.3 billion, soared 70% on the day.

In addition to five straight days of airstrikes between Israel and Iran, weaker-than-expected US retail sales for May also weighed on the market. May retail sales were down 0.9%, much more than the economists' estimate of a 0.6% decrease, showing that US consumer sentiment is sharply contracting due to tariff effects.

On Monday evening, President Donald Trump sparked uncertainty when he wrote on his social media, "Everyone must evacuate Tehran immediately."

Jim Reid, a strategist at Deutsche Bank, said, "It is uncertain whether any meaningful results came out of the summit, or whether President Trump hinted at new information through his posts and G7's early departure."

Chris Rupkey, Chief Economist at FwdBonds, commented, "Consumers are feeling uneasy about what will happen next and, overall, are choosing to save rather than spend, which is slowing the economy."

Contributing journalist Jung-A Kim kja@hankyung.com