• Solar stocks drop as US Senate proposes to phase out tax credits
• Eli Lilly to acquire Verve Therapeutics for up to $1.3 bln
• Retail sales post biggest drop in four months in May
• Indexes: Dow down 0.7%, S&P 500 down 0.8%, Nasdaq down 0.9%

NEW YORK, June 17 (Reuters) - U.S. stocks finished with losses on Tuesday as the Israel-Iran conflict raged on for a fifth day and kept investor anxiety high, with the U.S. military moving fighter jets to the Middle East.

Indexes added to losses in afternoon trading, and the Cboe Volatility index (.VIX) , opens new tab rose to end at 21.6, its highest close since May 23.

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Reuters reported, citing three U.S. officials, that the U.S. military is deploying more fighter aircraft to the Middle East and extending the deployment of other warplanes.

President Donald Trump called for Iran's "unconditional surrender." The war began on Friday when Israel attacked Iran's nuclear facilities.

"We're in a period where visibility is not great, uncertainty is high, and the wall of worry is under construction," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis, Minnesota.

Besides the Middle East conflict, investors are closely watching for any new information on Trump's tariffs, his tax-cut bill and U.S. interest rates.

A Federal Reserve monetary policy decision is expected on Wednesday, with policymakers widely seen leaving rates unchanged.

All of the major S&P 500 sectors were lower except for energy (.SPNY) , opens new tab, which gained along with sharply higher oil prices. Investors have worried that the conflict could create bottlenecks for oil exports from the oil-rich Middle East.

Defense shares also rose, including Lockheed Martin (LMT.N) , opens new tab, which was up 2.6%.

The Dow Jones Industrial Average (.DJI) , opens new tab fell 299.29 points, or 0.70%, to 42,215.80, the S&P 500 (.SPX) , opens new tab lost 50.39 points, or 0.84%, to 5,982.72 and the Nasdaq Composite (.IXIC) , opens new tab lost 180.12 points, or 0.91%, to 19,521.09.

Sandven said the market could trade sideways until investors get more clarity, but earnings and other factors are likely to remain favorable for equities.

Solar stocks fell after U.S. Senate Republicans late on Monday unveiled proposed changes to Trump's tax-cut bill, including a phase-out of solar, wind and energy tax credits by 2028.

Shares of Enphase Energy (ENPH.O) , opens new tab fell 24% and Sunrun (RUN.O) , opens new tab dropped 40%.

Eli Lilly (LLY.N) , opens new tab shares eased 2% after the company agreed to acquire Verve Therapeutics (VERV.O) , opens new tab for up to $1.3 billion. Shares of Verve surged.

Earlier Tuesday, data showed U.S. retail sales dropped more than expected in May, while factory production barely rose last month.

"The resilient consumer is getting skittish," said Brian Jacobsen, chief economist at Annex Wealth Management.

Declining issues outnumbered advancers by a 2.07-to-1 ratio on the NYSE. There were 97 new highs and 77 new lows on the NYSE.

On the Nasdaq, 1,325 stocks rose and 3,130 fell as declining issues outnumbered advancers by a 2.36-to-1 ratio.

Volume on U.S. exchanges was 15.71 billion shares, compared with the 17.98 billion average for the full session over the last 20 trading days.

https://www.reuters.com/business/wall-street-futures-edge-lower-mideast-conflict-continues-2025-06-17/