U.S. stocks slipped Tuesday as fresh concerns over tariffs and slowing economic activity weighed on investor sentiment.

S&P 500: –0.5%

Nasdaq: –0.7%

Dow Jones: –0.1%

Tariffs Pressuring Profits

Several companies, including Caterpillar and Yum Brands, warned of higher costs in Q2 due to newly imposed U.S. tariffs. The sweeping duties, ranging from 10% to 41%, target over 70 countries and are set to take effect on August 7.

Economic Slowdown Worries

A disappointing ISM services index reading pointed to stagnant growth and rising costs, fueling stagflation fears. These signals weakened hopes for a near-term Fed rate cut, despite earlier market optimism.

Mixed Earnings Season

While 80% of S&P 500 firms have topped profit estimates, warnings about tariff-driven margin pressure have tempered investor enthusiasm. Tech companies like Palantir continue to benefit from AI growth, offering some support.

Outlook

Markets remain volatile as investors weigh strong earnings against the risks of inflation, trade uncertainty, and sluggish economic data.

Index YTD Return

S&P 500 +7.1%
Nasdaq Composite +8.3%
Dow Jones +3.7%
Russell 2000 –0.2%