United States stock markets retreated on Tuesday (Wednesday AEST) as investors reacted to weaker-than-expected economic data and renewed trade concerns following fresh tariff remarks from President Donald Trump.
The Dow Jones Industrial Average fell 61.9 points, or 0.1%, to close at 44,111.7. The S&P 500 declined 30.7 points, or 0.5%, to 6,299.2, while the Nasdaq Composite shed 137.0 points, or 0.7%, finishing at 20,916.6.
The pullback came after a volatile few sessions, including a more than 500-point fall in the Dow on Friday following jobs data that pointed to persistent labour market weakness.
Tuesday's session added to concerns, with the Institute for Supply Management's (ISM) services index coming in slightly below market expectations in July and raising fears of stagflation - a combination of slowing economic activity and elevated inflation.
The services sector comprises around 70% of the U.S. economy, and the stagnation in July’s data fuelled speculation that economic momentum is faltering.
Market sentiment also soured after President Trump told CNBC that new tariffs on semiconductors and pharmaceuticals were imminent.
"We're going to be announcing on semiconductors and chips, which is a separate category, because we want them made in the United States," Trump said, adding that he'll announce the new plan "within the next week or so".
Despite the broader market weakness, Palantir Technologies was a standout performer. Shares of the defence-focused tech firm jumped 7.9% after the company revealed that annual revenue had exceeded US$1 billion for the first time.
On the bond markets, the yield on the 10-year Treasury rose 0.3% to 4.208%, while the 2-year yield climbed 1.3% to 3.726%.
