US stocks slip following the latest discouraging signal on the economy

NEW YORK (AP) — U.S. stock indexes slipped on Tuesday following the latest discouraging signal on the U.S. economy.

The S&P 500 fell 0.5%, coming off a whipsaw stretch where it went from its worst day since May to its best since May. The Dow Jones Industrial Average dropped 61 points, or 0.1%, and the Nasdaq composite fell 0.7%.

A weaker-than-expected report on activity for U.S. businesses in services industries like transportation and retail added to worries that President Donald Trump’s tariffs may be hurting the economy. But increased hopes for coming cuts to interest rates by the Federal Reserve, along with a stream of stronger-than-expected profit reports from U.S. companies, helped to keep the losses in check. The S&P 500 remains within 1.4% of its record.

Edgewell Personal Care, the company behind the Schick, Playtex and Banana Boat brands, fell 18.8% after reporting lower profit and revenue for the latest quarter than analysts expected. CEO Rod Little said it was a very weak season for sun care in North America, while tariffs are acting as a drag on profits.

All kinds of companies have been telling investors how much they expect tariffs to shave off their earnings this year, and trade policy was one of the most common topics U.S. services businesses talked about in the latest monthly survey compiled by the Institute for Supply Management about their activity.

“Tariffs are causing additional costs as we continue to purchase equipment and supplies,” one company in the health care and social assistance business said, for example. “Though we need to continue with these purchases, the cost is significant enough that we are postponing other projects to accommodate these cost changes.”

Another business in the real estate, rental and leasing industry told the institute that economic “uncertainty remains the dominant theme. However, the tariff talk has turned out to be much more bluster than actual policy, and businesses have seemed to tune out the noise.”

The threat of tariffs isn’t seeming to slow the juggernaut of investment flowing into artificial-intelligence technology.

Palantir Technologies rose 7.8% after the AI-platform provider reported a stronger profit for the latest quarter than analysts expected. The AI darling also raised its forecast for revenue over the full year, and its stock climbed further after it had already doubled for the year so far coming into the day.

“We continue to see the astonishing impact of AI leverage,” CEO Alex Karp said.

Axon Enterprise leaped 16.4% after the company, which sells Tasers, body cameras and software to public safety departments, reported a much stronger profit than analysts expected. It also cited growth in its AI offerings, which can save time for transcriptions and other tasks, and raised its forecast for revenue this year.

On the losing side of Wall Street was American Eagle Outfitters, which dropped 9.5% to give back some of its 23.6% jump from the day before. That’s when Trump weighed in on the debate surrounding the retailer’s advertisements, which highlight actor Sydney Sweeney’s great jeans.

Some critics thought the ad’s reference to the blonde-haired and blue-eyed actor’s “great genes” may be extolling a narrow set of beauty standards, while Trump said that being “WOKE is for losers.”

Yum Brands fell 5.1% after the company behind KFC, Taco Bell and Pizza Hut reported results for the latest quarter that came up just short of analysts’ expectations.

All told, the S&P 500 sank 30.75 points to 6,299.19. The Dow Jones Industrial Average dipped 61.90 to 44,111.74, and the Nasdaq composite fell 137.03 to 20,916.55.

The pressure is on companies to report bigger profits after the U.S. stock market surged to record after record from a low point in April. The big rally fueled criticism that the broad market had become too expensive.

For stock prices to look like better bargains, companies could produce bigger profits, or interest rates could fall. The latter may happen in September, when the Federal Reserve has its next meeting.

Expectations have built sharply for a rate cut at that meeting since a report on the U.S. job market on Friday came in much weaker than economists expected. Lower interest rates would make stocks look less expensive, while also giving the overall economy a boost. The potential downside is that they could push inflation higher.

Treasury yields sank sharply after Friday’s release of the jobs report, and they haven’t recovered. The yield on the 10-year Treasury eased to 4.19% from 4.22% late Monday and from 4.39% just before the release of the jobs report. That’s a significant move for the bond market.

In stock markets abroad, indexes rose across much of Europe and Asia.

India’s Sensex was an outlier and dipped 0.4% on concerns about trade tensions with the United States as the Trump administration pushes for cutbacks in the country’s oil purchases from Russia.

AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

A Trader works on the floor of the New York Stock Exchange, Friday, Aug. 1, 2025, in New York. (AP Photo/Yuki Iwamura)

Currency traders work near a screen showing the Korea Composite Stock Price Index (KOSPI), top left, and the foreign exchange rate between U.S. dollar and South Korean won, top center, at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Tuesday, Aug. 5, 2025. (AP Photo/Ahn Young-joon)

Currency traders watch monitors near a screen showing the Korea Composite Stock Price Index (KOSPI) at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Tuesday, Aug. 5, 2025. (AP Photo/Ahn Young-joon)

A currency trader works near a screen showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Tuesday, Aug. 5, 2025. (AP Photo/Ahn Young-joon)

Several Middle Eastern allies of the United States have urged the Trump administration to hold off on strikes against Iran for the government’s deadly crackdown on protesters, according to an Arab diplomat familiar with the matter.

Top officials from Egypt, Oman, Saudi Arabia and Qatar have raised concerns in the last 48 hours that a U.S. military intervention would shake the global economy and destabilize an already volatile region, said the diplomat who spoke on condition of anonymity to describe the sensitive conversations.

Oil prices fell Thursday as the markets appeared to take note of President Donald Trump’s shifting tone as a sign that he’s leaning away from attacking Iran after days of launching blistering threats at Tehran for its brutal crackdown.

Nevertheless, White House press secretary Karoline Leavitt on Thursday maintained that “all options remain on the table” for Trump as he deals with Iran.

Here's the latest:

The White House and a bipartisan group of governors are pressuring the operator of the mid-Atlantic power grid to take urgent steps to boost energy supply and curb price hikes, holding a Friday event aimed at addressing a rising concern among voters about the enormous amount of power used for artificial intelligence ahead of elections later this year.

The White House said its National Energy Dominance Council and the governors of several states, including Pennsylvania, Ohio and Virginia, want to try to compel PJM Interconnection to hold a power auction for tech companies to bid on contracts to build new power plants.

The Trump administration and governors will sign a statement of principles toward that end Friday.

▶ Read more about the administration and AI-driven power shortages

The Justice Department’s investigation into Federal Reserve Chair Jerome Powell has brought heightened attention to a key drama that will play out at the central bank in the coming months: Will Powell leave the Fed when his term as chair ends, or will he take the unusual step of remaining a governor?

Powell’s term as Fed chair ends May 15, but because of the central bank’s complex structure, he has a separate term as one of seven members of its governing board that lasts until January 31, 2028. Historically, nearly all Fed chairs have stepped down from the board when they’re no longer chair. But Powell could be the first in nearly 50 years to stay on as a governor.

Many Fed-watchers believe the criminal investigation into Powell’s testimony about cost overruns for Fed building renovations was intended to intimidate him out of taking that step. If Powell stays on the board, it would deny the White House a chance to gain a majority, undercutting the Trump administration’s efforts to seize greater control over what has for decades been an institution largely insulated from day-to-day politics.

▶ Read more about Federal Reserve Chair Jerome Powell

Trump on Thursday announced the outlines of a health care plan he wants Congress to take up as Republicans have faced increasing pressure to address rising health costs after lawmakers let subsidies expire.

The cornerstone is his proposal to send money directly to Americans for health savings accounts so they can handle insurance and health costs as they see fit. Democrats have rejected the idea as a paltry substitute for the tax credits that had helped lower monthly premiums for many people.

Trump’s plan also focuses on lowering drug prices and requiring insurers to be more upfront with the public about costs, revenues, rejected claims and wait times for care.

Trump has long been dogged by his lack of a comprehensive health care plan as he and Republicans have sought to unwind former President Barack Obama’s signature legislation, the Affordable Care Act. Trump was thwarted during his first term in trying to repeal and replace the law.

▶ Read more about Trump’s health care plan

Most American presidents aspire to the kind of greatness that prompts future generations to name important things in their honor.

Donald Trump isn’t leaving it to future generations.

As the first year of his second term wraps up, his Republican administration and allies have put his name on the U.S. Institute of Peace, the Kennedy Center performing arts venue and a new class of battleships.

That’s on top of the “Trump Accounts” for tax-deferred investments, the TrumpRx government website soon to offer direct sales of prescription drugs, the “Trump Gold Card” visa that costs at least $1 million and the Trump Route for International Peace and Prosperity, a transit corridor included in a deal his administration brokered between Armenia and Azerbaijan.

On Friday, he plans to attend a ceremony in Florida where local officials will dedicate a 4-mile (6-kilometer) stretch of road from the airport to his Mar-a-Lago estate in Palm Beach as President Donald J. Trump Boulevard.

▶ Read more about Trump’s renaming efforts

Nearly a year into his second term, Trump’s work on the economy hasn’t lived up to the expectations of many people in his own party, according to a new AP-NORC survey.

The poll from The Associated Press-NORC Center for Public Affairs Research finds a significant gap between the economic leadership Americans remembered from Trump’s first term and what they’ve gotten so far as he creates a stunning level of turmoil at home and abroad.

Just 16% of Republicans say Trump has helped “a lot” in addressing the cost of living, down from 49% in April 2024, when an AP-NORC poll asked Americans the same question about his first term.

At the same time, Republicans are overwhelmingly supportive of the president’s leadership on immigration — even if some don’t like his tactics.

There is little sign overall, though, that the Republican base is abandoning Trump. The vast majority of Republicans, about 8 in 10, approve of his job performance, compared with 4 in 10 for adults overall.

▶ Read more about the poll’s findings

Several Middle Eastern allies of the United States have urged the Trump administration to hold off on strikes against Iran for the government’s deadly crackdown on protesters, according to an Arab diplomat familiar with the matter.

Top officials from Egypt, Oman, Saudi Arabia and Qatar have raised concerns in the last 48 hours that a U.S. military intervention would shake the global economy and destabilize an already volatile region, said the diplomat who spoke on condition of anonymity to describe the sensitive conversations.

Oil prices fell on Thursday as the markets appeared to take note of President Donald Trump’s shifting tone as a sign that he’s leaning away from attacking Iran after days of launching blistering threats at Tehran for its brutal crackdown.

Nevertheless, White House press secretary Karoline Leavitt on Thursday maintained that “all options remain on the table” for Trump as he deals with Iran.

▶ Read more about Trump and Iran

— Matthew Lee, Aamer Madhani and Ben Finley

President Donald Trump speaks during an event to honor the 2025 Stanley Cup Champion Florida Panthers in the East Room of the White House, Thursday, Jan. 15, 2026, in Washington. (AP Photo/Alex Brandon)