Wall Street pares gains after fresh economic data
In early trading on Tuesday, the Dow Jones Industrial Average fell 63.46 points, or 0.14 per cent, to 44,110.18, and the S&P 500 lost 1.86 points, or 0.03 per cent, to 6,328.08.
The Nasdaq Composite gained 37.45 points, or 0.18 per cent, to 21,091.04.
US services sector growth unexpectedly stalled in July, as new orders barely budged and hiring slipped further - even as input costs soared at their fastest pace in nearly three years - highlighting how uncertainty around the Trump administration's tariff policy continues to weigh on businesses.
Wall Street had roared back to life on Monday by posting its best session since May 27 and recouping last week's losses when disappointing July jobs data and sharp downward revisions to prior months fuelled expectations of a Fed rate cut in September.
As per CME Group's FedWatch tool, odds of a September cut stand at 90 per cent, up sharply from 63.3 per cent just a week ago - and market watchers are eyeing at least two quarter-point cuts by year-end.
Earnings from major names on Tuesday include Advanced Micro Devices, Snap and Rivian.
Pfizer gained 3.6 per cent in after raising its annual profit forecast, while Palantir Technologies rose 8.6 per cent as it boosted its annual revenue forecast.
Meanwhile, President Donald Trump's decision to fire the head of the Bureau of Labour Statistics, responsible for past jobs data, stoked investors' fears about the integrity of economic data.
Trump on a CNBC interview said he would "shortly" announce his pick for an open seat on the Federal Reserve's board of governors and possibly his nominee for Fed chair as well.
"You can announce who the next chair is, but I don't think that Chair Powell will be going anywhere until the end of his term. I also don't think that whoever is announced as the new Fed chair will really be impactful," said Art Hogan, chief market strategist at B Riley Wealth.
Investors also weighed the impact of US tariffs on global economies and corporate earnings.
Trump signalled that the US could soon slap a "small tariff" on pharmaceutical imports, with the potential for steeper rates down the line.
He also hinted at progress toward a trade deal with China, suggesting a possible meeting with President Xi Jinping by this year's end if talks succeed.
Beyond last week's jobs data jolt, Wall Street has stayed buoyant, fuelled by blockbuster earnings from the "Magnificent 7" tech giants, with Nvidia's results on deck in three weeks.
Reflecting the market's upbeat mood, HSBC just boosted its S&P 500 year-end target by more than 800 points to 6400, citing AI excitement and easing US policy uncertainty.
Caterpillar slipped 0.3 per cent after reporting a lower second-quarter profit, hurt by sluggish demand for construction equipment and higher costs tied to US tariffs.
KFC parent Yum Brands fell 2.8 per cent after missing estimates for second-quarter comparable sales and profit.
Advancing issues outnumbered decliners by a 1.29-to-1 ratio on the NYSE and by a 1.07-to-1 ratio on the Nasdaq.
The S&P 500 posted 31 new 52-week highs and four new lows, while the Nasdaq Composite recorded 54 new highs and 40 new lows.
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