Stocks turn negative as economic data and tariff uncertainty weigh

Wall Street's main indexes swung to losses on Tuesday after data showed US services activity unexpectedly stalled and investors considered the impact of US trade policies on corporate profits.

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At II:39 a.m. ET, the Dow Jones Industrial Average fell 121.13 points, or 0.27%, to 44,052.51, the S&P 500 lost 34.47 points, or 0.54%, to 6,295.47 and the Nasdaq Composite lost 135.41 points, or 0.64%, to 20,918.17.

ISM’s non manufacturing purchasing managers index (PMI) slipped to 50.1 last month from 50.8 in June, as little changes in orders and weaker hiring, alongside rising input costs, highlighted persistent uncertainty from President Donald Trump's tariff policy.

Seven of II S&P 500 sub-sectors traded in the red, with a 1.1 drop in energy leading the declines.

"The ISM services survey highlights the challenges for the Fed in the coming months, with the activity and employment indicators weakening even as the prices paid index rose to a new cyclical high," said Alexandra Brown, North America economist at Capital Economics.

Caution also permeated after Trump signaled that the US could soon slap a "small tariff" on pharmaceutical imports before increasing the rate subsequently. The president also suggested announcing tariffs on semiconductors and chips in "next week or so".

The technology index was down 0.68 and the Philadelphia Semiconductor Index declined 1.58.

Tariffs also took a bite out of major corporations' profits, with industrial bellwether Caterpillar warning of an up to $1.5 billion hit in 2025.

The construction and mining equipment maker slipped 0.68.