U.S. stocks on Wall Street closed lower on Tuesday local time (Wednesday morning WIB), as growing geopolitical tensions and disappointing retail sales data weighed heavily on investor sentiment.

According to Xinhua, Wednesday, June 18, 2025, the Dow Jones Industrial Average fell by 299.29 points, or 0.70 percent, closing at 42,215.8. The S&P 500 index declined 50.39 points, or 0.84 percent, to 5,982.72. Meanwhile, the Nasdaq Composite dropped 180.12 points, or 0.91 percent, ending the session at 19,521.09.

Ten out of the 11 major sectors within the S&P 500 ended in negative territory, led by declines in healthcare and consumer discretionary sectors, which fell by 1.64 percent and 1.55 percent, respectively. The energy sector, however, reversed course and gained 1.03 percent.

All major indexes extended their losses and closed lower after U.S. President Donald Trump, in a social media post, demanded Iran’s unconditional surrender and claimed that the U.S. knows the location of Iran’s leader.

French President Emmanuel Macron stated that Trump had proposed a ceasefire deal between Iran and Israel. However, Trump denied that his departure from the G7 summit had anything to do with the ceasefire, asserting that the reason was much broader.

Markets had shown cautious recovery on Monday amid reports that Iran was open to negotiating a ceasefire and restarting talks over its nuclear program. But on Tuesday, new headlines emerged indicating the U.S. was considering military action, raising fears of prolonged instability in the Middle East.

Market Worries Over Trade Uncertainty

Besides geopolitical concerns, investors also faced fresh uncertainty regarding trade policy. As the deadline for lifting Trump-era tariff suspensions approaches, U.S. officials are pushing hard to secure a new trade agreement during the G7 summit.

A trade deal was reached on Monday between President Trump and U.K. Prime Minister Keir Starmer, but progress with other partners remains elusive.

Additional pressure came from disappointing U.S. retail sales data, which fell 0.9 percent in May—more than economists had forecast. This drop suggests that consumers may have frontloaded spending in anticipation of higher prices due to tariffs and are now cutting back.

The market's attention has now shifted to the Federal Reserve’s two-day policy meeting that began on Tuesday. While the Fed is widely expected to keep interest rates unchanged on Wednesday, investors will be closely analyzing any revisions to the central bank’s economic outlook.

There is still uncertainty over whether policymakers continue to anticipate two rate cuts in 2025, especially amid recent signs of easing inflation and weakening consumer demand.