Concerns over further escalation in the Middle East conflict led to a decline in US stock markets on Tuesday. Investors are worried about the increasing geopolitical tensions between Israel and Iran, which could weigh on the global market environment.
Open Escalation in the Middle East
Since June 13, 2025, the conflict between Israel and Iran has escalated openly: Israel launched a major attack on Iranian military targets, including launch pads for ground-to-ground missiles and missile depots and manufacturing facilities. Iran responded with massive counterstrikes, including over 65 fired rockets and numerous drone attacks on Israeli territory. These military confrontations have increased uncertainty in the financial markets.
Reactions from Tehran
The Supreme Leader of Iran, Ayatollah Ali Khamenei, again threatened Israel with a strong response against the “Zionist terror regime.” The ongoing violence and the danger of the war expanding in the region elevate fears of further disruptions in global supply chains and energy price fluctuations—factors that unsettle investors.
Flight to Safe Havens
These geopolitical risks led investors to sell risk assets like stocks on Tuesday and retreat to safer investments. This particularly pushed US exchanges into the negative.
In summary, the current escalation in the Middle East war between Israel and Iran is causing significant uncertainty among investors worldwide. The fear of the conflict expanding is noticeably burdening the stock markets.