Wall Street stocks dipped following data showing an uptick in US inflation as the United States and Iran traded a new round of attacks.

Oil prices moved modestly higher after the US military struck southern Iran following the downing of an American Apache helicopter a day earlier.

“The war with Iran seems to be getting longer, not shorter; that doesn’t help the psychology,” says Art Hogan of B Riley Wealth Management.

Data shows that the consumer price index rose 4.2 per cent year-on-year in May, up from April’s 3.8pc figure and a new three-year high.

Analyst Stephen Innes notes the data is not as worrying as it first appears.

“The inflation fire is burning, but it has not yet jumped every fence in the neighbourhood,” he says. “[This] gave the market the narrow escape hatch it needed.”