U.S. stock markets dipped Tuesday as investors reacted to weaker-than-expected economic data and fresh tariff comments from President Donald Trump, raising concerns about stagflation and economic slowdown.
The S&P 500 fell 0.49% to close at 6,299.19, while the Nasdaq Composite declined 0.65% to 20,916.55. The Dow Jones Industrial Average slipped 61.90 points, or 0.14%, ending at 44,111.74.
The market drop followed the release of the ISM Services index, which showed no growth in July, signaling potential trouble ahead for the sector that represents nearly 70% of the U.S. economy. This data added to concerns of stagflation—a combination of high inflation and low employment.
Adding to investor unease, Trump told CNBC that new tariffs on semiconductors and pharmaceuticals would be announced “within the next week or so,” as part of a strategy to promote domestic production.
Despite the broader market decline, Palantir stood out, gaining 7.9% after reporting over $1 billion in revenue for the first time. However, Caterpillar ended the day flat after missing earnings expectations, and Eaton shares fell 7% on disappointing guidance.
Terry Sandven of U.S. Bank noted, “We’re likely in a period of consolidation. Valuations are high, but inflation remains tame, rates are set to fall, and earnings are improving.”