Stocks Slip After Latest Warning Sign on Economy

US stock indexes slipped Tuesday following the latest discouraging signal on the US economy.

• The S&P fell 30.75 points, or 0.5%, to 6,299.19, coming off a whipsaw stretch where it followed its worst day since May with its best since May.
• The Dow Jones Industrial Average fell 61.90 points, or 0.1%, to 44,111.74.
• The Nasdaq composite fell 137.03 points, or 0.7%, to 20,916.55.

A weaker-than-expected report on activity for US services businesses added to worries that President Trump's tariffs may be hurting the economy, the AP reports. But hopes for coming cuts to interest rates by the Federal Reserve, along with a stream of stronger-than-expected profit reports from US companies, helped keep the losses in check.

Palantir Technologies jumped 7.9% after the provider of AI platforms reported a stronger profit for the latest quarter than analysts expected. The company also raised its forecast for revenue over the full year, and its stock climbed further after it had already doubled for the year so far coming into the day. "We continue to see the astonishing impact of AI leverage," CEO Alex Karp said. Axon Enterprise leaped 16.4% after the company, which sells Tasers, body cameras, and software to public safety departments, reported a much stronger profit than analysts expected. It also cited growth in its AI offerings, which can save time for transcriptions and other tasks, and raised its forecast for revenue this year.

On the losing side of Wall Street was American Eagle Outfitters, which dropped 9.5% to give back some of its 23.6% jump from the day before. Edgewell Personal Care, the company behind the Schick, Playtex, and Banana Boat brands, fell 18.8% after reporting lower profit and revenue for the latest quarter than analysts expected. CEO Rod Little said it was a very weak season for sun care in North America, while tariffs are acting as a drag on profits. Yum Brands fell 5.1% after the company behind KFC, Taco Bell, and Pizza Hut reported results for the latest quarter that came up just short of analysts' expectations.

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Trade policy was one of the most common topics US services businesses talked about in the latest monthly survey compiled by the Institute for Supply Management about their activity. "Tariffs are causing additional costs as we continue to purchase equipment and supplies," one company in the health care and social assistance business said. "Though we need to continue with these purchases, the cost is significant enough that we are postponing other projects to accommodate these cost changes." The ISM survey showed that US services activity flatlined in July, adding to the "stagflation" fears raised by the recent weak jobs report, CNBC reports.