US open: Tensions in the Gulf and weak consumer confidence drive stocks south
Wall Street headed south at the open as tensions between Washington and Tehran continued to build and on the heels of some much weaker-than-expected consumer confidence data.
As of 1535 BST, the Dow Jones Industrial Average was down 0.27% at 26,654.89, while the S&P 500 had also dropped 0.27% to 2,937.43 and the Nasdaq Composite was sliding 0.45% to 7,970.01.
The Dow opened 72.65 points lower after closing just 8.4 points higher on Monday.
While a lot of Tuesday's focus was set to be on the US central bank, with five key Fed policymakers, including chairman Jerome Powell, scheduled to speak throughout the course of the day, investors were also keeping tabs on the news-flow out of the Middle East after Donald Trump signed an executive order slapping Iran's supreme leader and eight Iranian Revolutionary Guard commanders with "hard-hitting" new sanctions following the downing of an unmanned US drone last week.
In response, Tehran said the latest moves by Washington meant the "permanent closure" of diplomatic channels between the two countries, labelling them "outrageous and idiotic".
Investors were also eagerly anticipating a meeting between Trump and Chinese President Xi Jinping later in the week which would be the first face-to-face meeting between the pair since trade talks broke down in May, resulting in a tit-for-tariffs battle between the two superpowers.
In addition to the Fed speak, which will centre around chairman Jerome Powell speaking at the Council on Foreign Relations at 1800 BST, there was also a deluge of economic data on Tuesday.
US house prices edged past forecasts in April even as the annual rate of price gains added to evidence of an ongoing slowdown, although some economists believed prices might be close to hitting bottom.
In seasonally adjusted terms, the Federal Housing Finance Agency's home price index advanced at a month-on-month clip of 0.4% and by 5.2% year-on-year.
Economists had forecast a rise of 0.3% versus March and of 4.9% versus the same month one year ago.
One year ago, the HPI had risen by 6.8%.
A rival gauge of house prices, Standard & Poor's CoreLogic Case Shiller national home price index, also revealed a declining trend in terms of the year-on-year rate of change, with the annual pace of price increases slowing from 3.7% for March to 3.5% in April.
Still on the housing front, new-home sales ran at a 626,000 seasonally adjusted annual rate during May, according to the Commerce Department.
The median price of a new home sold in May was $308,000 - 2.7% weaker than the year prior.
Elsewhere, consumer confidence fell in June to its lowest level in almost two years as Americans became more concerned about trade tensions with China.
The consumer confidence index fell to 121.5 from a revised 131.1 in May, according to the Conference Board, its weakest result since September 2017 and well short of expectations for a reading of 130.4.
Lastly, the latest manufacturing index from the Richmond Fed came in at 3 versus, lower than the reading of 5 last month.
On the corporate front, FactSet shares picked up 2.17% in early trade after reporting solid EPS and revenue growth and Lennar opened 1.09% firmer on stronger home sales.
FedEx and Micron were both scheduled to release their latest quarterly results after the close.
In deals news, Chicago-based biopharmaceutical company Abbvie snapped up Botox-maker Allergan for roughly $63bn, mostly in cash.