S&P 500 closes lower Tuesday, weighed down by tariff fears and poor economic data

The S&P 500 pulled back Tuesday as traders digested weaker-than-expected economic data and new tariff comments from President Donald Trump, stoking concerns about the state of the U.S. economy.

The broad market index dropped 0.49% and closed at 6,299.19, while the Nasdaq Composite shed 0.65% to end at 20,916.55. The Dow Jones Industrial Average shed about 61.90 points, or 0.14%, settling at 44,111.74. 

The market has seen a whirlwind past few days, with the Dow falling more than 500 points Friday after the latest jobs report signaled that the labor market has been weakening for months. The blue-chip index then recovered those losses Monday, surging almost 600 points.

The indexes took a leg lower Tuesday after the ISM Services index flatlined in July, adding to stagflation concerns that were stirred up in the wake up the recent job figures. Stagflation indicates a scenario of higher inflation and lower employment. Services makes up about 70% of the U.S. economy, so a slowdown in the sector could mean trouble ahead.

Stocks were also bogged down by Trump telling CNBC that tariffs on chips, as well as pharmaceuticals, were coming soon.

“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.”