US Stock Market August 2025: Stocks Dip Amid New Economic Concerns

The US stock market August 2025 opened lower Tuesday after fresh economic data raised concerns about weakening business activity. The S&P 500 fell 0.3% in morning trading, the Dow Jones slipped 157 points, and the Nasdaq dropped 0.2%.

The slide followed a weaker-than-expected report on U.S. services industries, including retail and transportation. The report reignited fears that President Donald Trump’s trade policies may be hurting growth.

Trump Tariffs Raise Uncertainty, Even as Profits Beat Expectations

Tariffs were a major topic in the latest business survey by the Institute for Supply Management. Companies across industries warned that higher import costs were eating into profits and delaying investments.

One healthcare business cited “significant” price increases, saying they had to postpone other projects. Meanwhile, others downplayed the effects, calling the trade talk “more bluster than policy.”

Despite these concerns, earnings from tech and manufacturing giants provided some support for Wall Street.

AI Stocks Continue to Lead Market Strength

Palantir Technologies soared 8.7% after posting stronger-than-expected earnings. The company, known for its artificial intelligence platforms, raised its full-year revenue outlook.

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

Axon Enterprise also rallied 17.9%, driven by strong earnings and growing demand for its AI-based law enforcement tools. The company raised its forecast as it expands its software offerings.

DuPont added 0.5% after surpassing profit expectations and updating its yearly outlook. However, the company warned it expects a $20 million tariff-related hit in the second half of the year.

Fashion and Fast Food Stocks Slide

American Eagle Outfitters fell 8.2%, reversing part of Monday’s 23.6% gain. The surge came after Trump criticized criticism of the brand’s campaign featuring actress Sydney Sweeney. Trump labeled the backlash “WOKE nonsense,” boosting interest among supporters.

Yum Brands, the parent of KFC, Taco Bell, and Pizza Hut, dropped 2%. The company missed earnings expectations for the quarter.

Fed Rate Cuts Expected in September

While weak business data hurt investor sentiment, hopes for lower interest rates offered a cushion. Friday’s soft jobs report sparked expectations of a rate cut at the Federal Reserve’s September meeting.

Lower rates could ease pressure on stocks by reducing borrowing costs and making equities look more attractive compared to bonds.

The yield on the 10-year Treasury fell again Tuesday, dropping to 4.20% from 4.22% the previous day and from 4.39% before Friday’s job numbers.

Global Markets Mixed as Trade Tensions Linger

Most global indexes in Europe and Asia moved higher. However, India’s Sensex fell 0.4% on renewed tension with the U.S. over oil imports from Russia.

The US stock market August 2025 may continue to react to mixed signals: strong corporate earnings on one hand, and trade and growth concerns on the other.