US close: Stocks lower after services PMI unexpectedly falls

(Sharecast News) - Major indices closed slightly lower on Tuesday, taking a bite out of gains recorded in the previous session.

At the close, the Dow Jones Industrial Average was down 0.14% at 44,111.74, while the S&P 500 shed 0.49% to 6,299.19 and the Nasdaq Composite saw out the session 0.65% softer at 20,916.55.

The Dow closed 61.90 points lower on Tuesday, reversing some of the solid gains registered in the previous session as US stocks rebounded strongly after gloomy economic data raised the likelihood that the Federal Reserve will cut interest rates in an effort to shore up the economy.

In focus on Tuesday was news that Donald Trump had threatened to impose tariffs on pharmaceuticals imported into the US of as much as 250%, the highest rate he has threatened so far. Trump also announced that the White House would soon introduce fresh tariffs on semiconductor imports "within the next week or so".

Stocks headed south after the Institute for Supply Management's services PMI unexpectedly fell in July, dropping from 50.8 in June to 50.1, below forecasts of 51.5. July's reading showed that the services sector nearly stagnated, with a slowdown seen for business activity/production, new orders, and inventories. Price pressures also intensified to the highest since October 2022, with tariff-related impacts remaining the number one concern. Meanwhile, new exports and imports both moved from expansion to contraction, indicating that tariff tensions were impacting global trade.

Elsewhere on the macro front, US trade deficit narrowed to $60.2bn in June, according to the Bureau of Economic Analysis, the lowest since September 2023, compared to a revised $71.7bn gap in May and forecasts of a $61.6bn shortfall. Imports declined 3.7% to $337.5bn, the lowest since March 2024, whlie exports went down 0.5% to $277.3bn, the lowest since January.

Elsewhere, S&P Global revealed that the US services PMI increased to 55.70 points in July, up from 52.90 points in June, while the composite PMI ticked up to 55.10 points last month, up from 52.90 points in June.

In the corporate space, Palantir traded higher after the defence technology company revealed Q2 revenues had surpassed $1bn for the first time, while trade bellwether Caterpillar reported Q2 revenues of $16.6bn, slightly above expectations, but adjusted earnings per share of $4.72 fell short of the $4.90 expected on the Street, and drugmaker Pfizer delivered a strong quarter, with revenues of $14.7bn and adjusted EPS of $0.78, beating analyst expectations of $13.5bn and $0.58, respectively.

Elsewhere, KFC and Taco Bell owner Yum! Brands reported Q2 revenue of $1.93bn, up 10% year-over-year, and adjusted EPS of $1.44, narrowly missing expectations of $1.46, while Fox said Q4 revenues of $3.29bn and adjusted EPS of $1.27, driven by Tubi's growth, improved ratings at Fox News, and stronger pricing.

Chipmaker AMD posted weaker-than-expected quarterly earnings, even as revenues topped estimates, while shares in social media outfit Snap were down double digits after global average revenue per user missed Q2 expectations.

Reporting by Iain Gilbert at Sharecast.com

Dow Jones - Risers

Unitedhealth Group Inc. (UNH) $251.00 4.16%

Dow Chemical Co. (DOW) $22.38 3.66%

Intel Corp. (INTC) $20.19 3.54%

3M Co. (MMM) $150.09 1.50%

Chevron Corp. (CVX) $153.04 1.32%

Home Depot Inc. (HD) $385.41 1.21%

Merck & Co. Inc. (MRK) $80.79 1.16%

Boeing Co. (BA) $224.86 1.13%

Travelers Company Inc. (TRV) $265.17 0.83%

Walgreens Boots Alliance, Inc. (WBA) $11.69 0.26%

Dow Jones - Fallers

Salesforce.Com Inc. (CRM) $247.49 -1.91%

McDonald's Corp. (MCD) $298.77 -1.79%

Microsoft Corp. (MSFT) $527.75 -1.47%

Cisco Systems Inc. (CSCO) $67.52 -1.42%

Visa Inc. (V) $337.43 -1.38%

JP Morgan Chase & Co. (JPM) $291.37 -0.98%

Walt Disney Co. (DIS) $118.32 -0.86%

Goldman Sachs Group Inc. (GS) $720.91 -0.71%

American Express Co. (AXP) $296.64 -0.65%

Verizon Communications Inc. (VZ) $42.67 -0.65%

S&P 500 - Risers

Broadridge Fin Sol (BR) $265.33 6.79%

Advance Auto Parts (AAP) $57.09 6.65%

Archer-Daniels-Midland Co. (ADM) $57.62 6.00%

Pfizer Inc. (PFE) $24.75 5.18%

Unitedhealth Group Inc. (UNH) $251.00 4.16%

Jacobs Solutions Inc. (J) $145.21 3.78%

Intel Corp. (INTC) $20.19 3.54%

Macerich Co (MAC) $17.10 3.51%

Sealed Air Corp. (SEE) $29.96 3.38%

American Airlines Group (AAL) $11.64 3.28%

S&P 500 - Fallers

Gartner Inc. (IT) $243.93 -27.55%

Vertex Pharmaceuticals Inc. (VRTX) $374.98 -20.60%

Transdigm Group Inc. (TDG) $1,416.94 -11.94%

Fidelity National Information Services Inc. (FIS) $72.22 -8.54%

Henry Schein Inc. (HSIC) $64.83 -7.41%

Eaton Corporation plc (ETN) $356.45 -7.36%

Idexx Laboratories Inc. (IDXX) $641.94 -5.98%

Ball Corp (BALL) $54.30 -5.75%

AES Corp. (AES) $12.73 -5.21%

ONEOK Inc. (OKE) $75.70 -5.17%

Nasdaq 100 - Risers

Intel Corp. (INTC) $20.19 3.54%

American Airlines Group (AAL) $11.64 3.28%

Biomarin Pharmaceutical Inc. (BMRN) $61.93 2.69%

PACCAR Inc. (PCAR) $98.20 1.93%

Charter Communications Inc. (CHTR) $265.98 1.62%

Texas Instruments Inc (TXN) $185.40 1.46%

Align Technology Inc. (ALGN) $139.65 1.36%

Micron Technology Inc. (MU) $109.06 1.20%

Liberty Global plc Series A (LBTYA) $11.01 1.10%

Liberty Global plc Series C (LBTYK) $11.21 1.08%

Nasdaq 100 - Fallers

Vertex Pharmaceuticals Inc. (VRTX) $374.98 -20.60%

Henry Schein Inc. (HSIC) $64.83 -7.41%

Idexx Laboratories Inc. (IDXX) $641.94 -5.98%

Qvc Group Inc Series A (QVCGA) $3.33 -4.03%

KLA-Tencor Corp. (KLAC) $883.41 -3.52%

Monster Beverage Corp (MNST) $59.04 -2.17%

Baidu Inc. (BIDU) $85.86 -2.03%

Applied Materials Inc. (AMAT) $179.15 -2.01%

Check Point Software Technologies Ltd. (CHKP) $188.90 -2.00%

Intuit Inc. (INTU) $769.27 -1.99%