4:10pm: Nasdaq leads declines
Stocks ended slightly lower on Tuesday as Wall Street turned its attention to the next wave of corporate earnings.
The Dow Jones dipped 62 points, or 0.1%, to close at 44,112. The S&P 500 lost 0.5%, while the Nasdaq underperformed, falling 0.7% as tech shares took a breather.
Not everything was in the red, though. The small-cap Russell 2000 bucked the trend with a 0.6% gain, adding 13 points.
Investors are bracing for a busy week of earnings. Advanced Micro Devices (AMD) and Rivian (RIVN) will report results after the bell on Tuesday, with McDonald’s (MCD) and Disney (DIS) set to follow on Wednesday. The results could offer fresh insight into the strength of consumer spending and demand for AI-related products, two key themes driving markets this year.
3:30pm: Proactive news headlines
- Replenish Nutrients Holding Corp completed the first phase of commissioning at its Beiseker facility in Alberta, launching initial production runs of regenerative fertilizer products.
- Seeing Machines Ltd received a reiterated ‘buy’ rating and price target from Stifel after reporting record quarterly production and strong growth in its driver monitoring technology business.
- NextSource Materials Inc. signed a multi-year offtake deal with Mitsubishi Chemical to supply graphite anode material for EV batteries in North America.
- North Bay Resources Inc. completed initial test mining at its Fran Gold Project in BC, extracting high-grade ore with assays up to 0.5 ounces per ton of gold.
- First Phosphate Corp. announced a non-brokered private placement for at least $1 million to meet investor demand.
- Zero Candida Ltd said its shares are now eligible for DTC electronic clearing and settlement in the United States.
- Orosur Mining Inc shares rose after the company reported high-grade gold infill drilling results at its Pepas prospect in Colombia.
2:40pm: Stocks on the move
- Kinross Gold Corporation earned a ‘Buy’ rating and a US$20 price target from UBS, sending shares up nearly 5% to US$18.
- Palantir Technologies Inc impressed Wall Street with accelerating growth and a $1 billion revenue quarter, prompting Bank of America to call it a “singularity” moment.
- Coinbase Global Inc announced a $2 billion convertible note offering, pushing shares down nearly 5% as investors reacted to the capital raise.
- NextSource Materials Inc. signed a multi-year offtake deal with Mitsubishi Chemical to supply graphite anode material for EV batteries in North America.
- Yum! Brands Inc missed second-quarter expectations due to weaker US same-store sales at Pizza Hut and KFC, causing shares to fall.
- Pfizer Inc raised its 2025 profit forecast after Q2 earnings beat expectations, driven by strong sales of Comirnaty and Paxlovid.
- Hims & Hers shares fell 12% pre-market after reporting Q2 revenue below estimates and offering cautious guidance despite 73% year-over-year growth.
1:02pm: Stocks struggle
US stocks moved lower in the early afternoon on Tuesday as the surprise ISM services PMI reading dampened investor sentiment.
The Nasdaq led the losses, down 0.5% at 20,961 points, while the S&P 500 was down 0.3% at 6,310 points and the Dow Jones slipped 2 points to 44,171 points.
“The surge from Friday’s lows was rudely interrupted by today’s US ISM services PMI,” IG chief market analyst Chris Beauchamp said.
“While bad data can boost hopes of a Fed rate cut, there was the kicker of a rise in the prices paid sub-index, reminding markets that inflation is still a force to be reckoned with. Yesterday’s huge surge is still intact, so we can’t write off the bounce just yet, but investors need to remember that a rate cut isn’t the be all and end all of the situation.”
11:40am: Trade deficit narrows
The US trade deficit narrowed sharply in June to $60.2 billion, its lowest level in nearly two years, as imports fell significantly, particularly in consumer goods, according to the Commerce Department.
Economists had expected a $61 billion gap.
The decline reflects an unwinding of earlier import surges, as businesses rushed to stock up ahead of anticipated tariffs.
Wells Fargo analysts said the shift is less about long-term changes in trade behavior and more about managing policy uncertainty. “Goods imports rose more in the single month of January this year than they did in total over the prior two years combined,” they noted. Imports fell in all three months of Q2, boosting GDP growth by a record 5 percentage points.
However, Wells Fargo cautioned that it is “premature to call this evidence of tariffs ‘working,’” and said trade policy uncertainty remains high. A modest trade-related lift to growth is expected later this year.
11:15am: Expansion slows to crawl
The US service sector is barely growing, with the ISM services index falling to 50.1 in July—its lowest possible level while still indicating expansion.
Wells Fargo analysts noted this figure reflects "the slowest possible pace of expansion" and marks the third-lowest reading since the onset of the pandemic in 2020.
While the headline number still points to growth, underlying indicators suggest weakness. Business activity, new orders, and employment all declined in July, with only supplier deliveries showing improvement—indicating longer wait times rather than economic strength.
Wells Fargo analysts argued that the service sector has not been immune to the effects of tariffs, despite appearances.
“A trend decline in discretionary services spending offered evidence that the consumer sector and the economy more broadly were already negatively impacted by tariffs,” analysts wrote.
Price pressures also intensified, with the prices paid index rising to 69.9, its highest since late 2022, suggesting businesses are struggling with higher costs.
10:35am: Services sector nearly stalls in July
Services sector growth slowed sharply in July, with the Institute for Supply Management (ISM) Services PMI falling to 50.1, well below expectations of 51.5 and barely above the 50 mark that separates expansion from contraction.
The report showed growing signs of strain, with the ISM Services Employment Index slipping to 46.4 from 47.2, signaling a second month of contraction in hiring activity. New orders also softened, declining to 50.3 from 51.3.
Meanwhile, inflationary pressures resurfaced. The ISM Prices Paid Index jumped to 69.9, significantly higher than the consensus forecast of 66.5, indicating that input costs for service providers remain elevated.
The data could complicate the Federal Reserve’s path forward on interest rates, as slowing demand collides with persistent inflation in key segments of the economy.
9.55am: Nasdaq and Palantir lead Wall Street higher
US stocks have got off to a modestly higher start, led by a 0.3% gain for the Nasdaq.
The S&P 500 is up 0.2% and Dow Jones is just above flat.
Palantir has risen 7% with this gain only topped by Axon Enterprise, as the security industry supplier's earnings also impressed. Tesla fell initially but is back in green now.
Pfizer stock is up over 3% after the drugmaker's earnings beat estimates, driven by Covid vaccine Comirnaty and antiviral Paxlovid.
Yesterday’s bounce (not rally) on the S&P500 was on a painfully low volume, especially compared to last week’s high-volume selloff (perhaps light retail buying or short covering to start the week?)
This means that the bounce (not rally) likely should not be trusted, and could… pic.twitter.com/CuoR6RQbaE
— Chris Stadele (@ChrisStadele) August 5, 2025
Elsewhere, Donald Trump has ruled out Scott Bessent as the next Federal Reserve chair, saying the US Treasury Secretary took his name out of consideration.
In macro data, the S&P services PMI came in stronger than expected at 55.7, versus 55.2. Traders will pay more attention to the ISM data out at 10am.
8.15am: Nasdaq to lead as Wall St continues to bounce back
Wall Street stock indices are set to start higher on Tuesday, further recouping losses from the end of last week as earnings season continued with strong results from Palantir overnight.
Nasdaq 100 futures were up 0.4%, while those for the S&P 500 gained 0.3% and for the Dow Jones just 0.1%.
This followed the tech-powered Nasdaq rising just under 2% yesterday, with the S&P and Dow adding 1.5% and 1.3% respectively, and the domestically focused small-cap Russell 2000 index jumped 2.1%.
This came as investors further increased their speculation that the Federal Reserve would ease policy in September, with markets now seeing over a 90% chance of a rate cut next month, according to the CME FedWatch tool, up from 40% before the non-farm payrolls.
The mood has also been helped by a decent earnings season so far, said Deutsche Bank macro strategist Jim Reid, who also noted that US Treasuries rallied, sending yields lower.
"Investors expect the Fed to shift their view on the state of the labour market after last week’s payrolls," he said, with this given "further credence" by comments from San Francisco Fed chief Mary Daly that two rate cuts this year was "an appropriate amount of recalibration".
Bonds "didn’t do much", in the view of Kenny Polcari at Slatestone, "mostly because everyone’s watching the slate of auctions on the horizon" including short-term Treasury bills this week and then the 20- and 30-year bonds later this month.
"What’s that telling you? Maybe it’s just positioning ahead of the auctions… or maybe it’s a sign that the bond market is starting to price in slower growth and real potential for easing – especially with the latest drama at the Fed," Polcari said.
With the market moving aggressively in favour of a September rate cut, market analyst Neil Wilson at Saxo said the macro data was indicating that the US is "closer to stagflationary territory, which has been a long-term fear among bears; ie that we end up with a 1970s market that drifts sideways".
"So far, the market has held up and looked beyond the tariff risks, but we may at last be seeing the hard data finally catch up with the soft survey data," Wilson said.
"Front-loading and corporates wearing tariff costs by maintaining flat pricing may have masked the real impact but this may be changing."
Ahead of the new August 7 trade deadline for implementing US tariffs, there were some headlines on both sides of the Atlantic.
After Switzerland was hit with a 39% tariff last week, the Swiss government issued a statement saying that they are "ready to present a more attractive offer, taking US concerns into account and seeking to ease the current tariff situation".
Palantir Technologies Inc (NYSE:PLTR) shares jumped almost 5% in premarket trading following the software company’s earnings last night saw its first-ever quarter exceeding $1 billion in revenue.
Already the best-performing stock this year, the government supplier hailed the impact of AI as a key driver of sales and improved guidance, with CEO Alex Karp saying, "we’re very sorry our haters are disappointed."