NEW YORK (AP) 鈥� U.S. stocks slumped under the weight of a jump for the price of oil. The S&P 500 fell 0.8% Tuesday following signals that Israel鈥檚 conflict with Iran may be worsening and that one of the U.S. economy鈥檚 main engines is weakening. That nearly erased the S&P 500鈥檚 gain for the week. The Dow Jones Industrial Average dropped 0.7%, and the Nasdaq composite sank 0.9%. Treasury yields also fell following a weaker-than-expected report on sales at U.S. retailers. Crude oil prices rose more than 4% on worries about damage to the flow of oil because of fighting between Israel and Iran.
THIS IS A BREAKING NEWS UPDATE. AP鈥檚 earlier story follows below.
NEW YORK (AP) 鈥� U.S. stocks slumped on Tuesday under the weight of another jump for the price of oil. It was a for financial markets after Wall Street鈥檚 worries about Israel鈥檚 fighting with Iran .
The S&P 500 fell 0.8% following signals that the may be worsening and that one of the U.S. economy鈥檚 main engines . The swing sent Wall Street鈥檚 main measure of health nearly back to where it started the week.
The Dow Jones Industrial Average was down 297 points, or 0.7%, as of 3:15 p.m. Eastern time, and the Nasdaq composite was 0.8% lower.
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鈥檚 fight with Iran by calling for 鈥淯NCONDITIONAL SURRENDER!鈥� and saying that 鈥淲e are not going to鈥� kill Iran鈥檚 leader, 鈥渁t least for now.鈥�
Before that, Trump had left a and warned that people in Iran鈥檚 capital should evacuate immediately. It took only about eight hours for Trump to go from suggesting a nuclear deal with Iran remained 鈥渁chievable鈥� to 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鈥檚 crude passes. Past conflicts in the area have caused spikes in oil prices, though they鈥檝e 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 , wind and other energy sources that produce fewer emissions that change the Earth鈥檚 climate.
Enphase Energy dropped 24.3%, and First Solar fell 18.5%.
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鈥檚 drop may have simply been a return to more normal trends.
In April, some shoppers had rushed to buy automobiles to get ahead of .
鈥淭oday鈥檚 data suggests consumers are downshifting, but they haven鈥檛 yet slammed the brakes,鈥� according to Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management
On the winning side of Wall Street was Jabil, which jumped 8.2% 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 81.3% 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鈥檚 stock slipped 1.7%.
All the action took place as the 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 , and it鈥檚 been on hold this year after cutting at the end of last year, because it鈥檚 waiting to see how much Trump鈥檚 tariffs will hurt the economy and raise inflation. has remained recently, and it鈥檚 near the Fed鈥檚 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. The two-year yield, which more closely tracks expectations for what the Fed will do with its overnight interest rate, fell to 3.94% from 3.97%.
In stock markets abroad, indexes fell across much of Europe after finishing mixed in Asia.
Tokyo鈥檚 Nikkei 225 index rose 0.6% after the Bank of Japan opted to keep its key interest rate unchanged. It鈥檚 been gradually raising its rate from near zero and cutting back on its purchases of Japanese government bonds to help counter inflation.
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AP Business Writer Elaine Kurtenbach contributed.
Stan Choe, The Associated Press
