Stan Choe, AP Business Writer
NEW YORK (AP) — The US stock index slips Tuesday following the latest disappointment signal on the US economy.
The S&P 500 has dropped by 0.3% in afternoon trading, coming out from its highest day since May. The Dow Jones industrial average rose 32 points (0.1%) as of 1:16pm east time, with the Nasdaq Composite down 0.5%.
A weaker than expected report on the activities of US companies in the transport, retail and other services industries, along with concerns that President Donald Trump’s tariffs are hurting the economy. However, the increased hopes of the Federal Reserve for interest rate reductions and the stronger profit reporting stream from US companies have helped to keep losses down.
Edgewell Personal Care, the company behind the boat brands of Schick, PlayTex and Banana, fell 22.4% after reporting lower profits and revenues than analysts expected. CEO Rod Little said it was a very weak season for sun care in North America, but tariffs are acting as a profit resistance.
Similarly, after reporting profits that did not meet analyst expectations, Caterpillar shifted between small profits and losses. Its operating profit has sank 18% from a year ago, mainly due to tariffs, which have made manufacturing more expensive. Stocks have recently increased by 0.5%.
Businesses of all kinds of people are telling investors how much they expect tariffs to cut revenue this year, and trade policy was one of the most common topics spoken by US services businesses in the past in their latest monthly survey compiled about their activities.
For example, one healthcare and social assistance business said, “As we continue to purchase equipment and supplies, tariffs are causing additional costs.” “We need to continue purchasing these, but costs are important enough as we are postponing other projects to accommodate these cost changes.”
Another business in the real estate, rental and leasing industries told the Institute that “economic uncertainty is the dominant theme.” But it turns out that tariff conversations are far more intense than actual policies, and businesses seem to be adjusting their noise.”
Even the tariff threat doesn’t seem to slow down the juggernaut of investments flowing into artificial intelligence technology.
Palantir Technologies rose 6.8% after AI platform providers reported higher profits in the recent quarter than analysts expected. AI Darling also raised its revenue forecasts for the whole year, with its inventory climbing further after already doubled in the past year.
“We continue to see the incredible impact of AI leverage,” CEO Alex Karp said.
Axon Enterprise reported a much stronger profit than analysts had expected as its company selling Taser, body cameras and software jumped 16.1%. We also cited the growth of AI products. This saved time on transcription and other tasks, increasing forecasts for this year’s revenue.
Wall Street’s losers are American Eagle trinkets, down 7.6% from the previous day to give back some of the 23.6% jump. That’s when Trump put a strong emphasis on the debate surrounding retailer advertising.
Some critics thought the ad’s reference to the “great genes” of the blonde hair and blue-eyed actor might praise narrow beauty standards, but Trump said “waking up is for the loser.”
Yum Brands fell 3.3% after the company behind KFC. TacoBell and Pizza Hut reported the latest quarter results that are not predicted by analysts.
After the US stock market surges to record after a record from a low point in April, pressure is on companies reporting greater profits. The large gatherings have fueled criticism that the broad market was too expensive.
For a stock price to look like a better bargain, which company needs to generate greater profits and interest rates need to fall. The latter could occur in September, when the Federal Reserve holds its next meeting.
Friday’s U.S. job market report has been much weaker than economists expected, leading to much higher expectations for rate cuts at that meeting. Lower interest rates will boost the economy as well as stocks appear cheaper. The potential downside is that it can increase inflation.
The Treasury Department has sank sharply since the release of its employment report on Friday and has not recovered. The 2010 Treasury yields have eased from 4.20% late on Monday, down from 4.22%, just before the employment report was released. That’s a big move for the bond market.
In overseas stock markets, indexes rose in most parts of Europe and Asia.
India’s Sensex is an outlier, soaking 0.4% over concerns over trade tensions with the US as the Trump administration calls for cuts in the country’s oil purchases from Russia.
AP business writers Matt Ott and Elaine Kurtenbach contributed.
Original issue: August 5, 2025 9:59am EDT
