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The United States 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.
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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.”
