As the U.S.-Iran war heats up again, these parts of the stock market and economy could be affected
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- S&P 500 fell only marginally Monday despite 10 straight nights of U.S. strikes on Iran, sitting just 2% below its June all-time high as investors largely shrugged off the escalation.
- Brent crude briefly topped $90 a barrel Monday and hovered just below Tuesday, while the U.S. 10-year Treasury yield traded above 4.6% — a level closely watched by traders.
- Art Hogan of B. Riley Wealth warned that if crude stays above $85–$90 through year-end, S&P 500 earnings estimates will need trimming and the index could fall into correction territory, though tech's 38% index weighting offers insulation.
- Mark Zandi of Moody's Analytics said there is "nothing but downside" for the U.S. and global economies, estimating the average American household has already lost about $1,100 from rising energy and military costs.
- Personal saving rate fell to 3% in May, down nearly 2 percentage points year-over-year, signaling consumers are depleting rainy-day funds to keep spending as gas hit $4 a gallon Monday for the first time in over a month.
- Costco reported "record-breaking volumes" for gas at the end of its fiscal Q3, while Consumer Edge flagged value-focused chains like Dollar General, Tractor Supply, and Texas Roadhouse as vulnerable to selective spending.
- Fed funds futures price an 83%+ chance the Federal Reserve holds rates steady at its next meeting, with economists noting a core CPI reading that strips out energy could keep the Fed on the sidelines.
Why it matters: The market's calm masks growing consumer pain: oil above $90 and a savings rate near 3% mean households have less cushion than when the war began, per Moody's Zandi, while value retailers like Dollar General and Tractor Supply face the most exposure if shoppers retrench — and the Fed still has 83%+ odds of holding rates, per CME data.
