Closing Recap

U.S. stocks finished mostly lower in a rotational session, as early gains evaporated following a weak ISM Services report that fueled economic concerns; small caps outperformed, gold gained, oil continued to slide, and Treasury yields were little changed. 

Key Takeaways 

• Stocks Fade on Weak ISM Data: Major indices gave back initial gains to finish mostly in the red after the July ISM Services PMI unexpectedly stalled, with new orders and employment weakening. 
• Rotational Day, Small Caps Outperform: The market saw clear rotation, with the tech-heavy Nasdaq leading decliners while the Russell 2000 held onto gains, though well off its highs. 
• Narrow Leadership Concerns: The market remains highly concentrated in a few mega-cap tech names (AAPL, MSFT, NVDA), which account for nearly 21% of the S&P 500. 
• Oil Prices Continue to Fall: WTI crude fell for the fourth consecutive day, pressured by slowing global growth concerns and planned OPEC+ supply increases. 
• Gold Recovers to Gains: Gold prices reversed early weakness to finish higher as the weak economic data and tariff uncertainty revived safe-haven demand and Fed cut hopes. 
• Yields & Dollar Steady: Treasury yields and the U.S. dollar were little changed as investors digested the mixed signals from economic data and trade commentary. 

Market Overview

U.S. equity markets experienced a day of indecision and rotation, ultimately closing mostly lower after early optimism gave way to concerns about a slowing services sector. Stocks initially built on yesterday’s strong rebound, with futures gaining overnight, supported by ongoing hopes for rate cuts and some de-escalation in trade rhetoric. However, the gains proved fleeting. The July ISM Services PMI report, released mid-morning, unexpectedly showed activity had nearly stalled, with the index falling to 50.1, well below expectations. Critically, the new orders and employment components within the report weakened, signaling a potential slowdown in the largest part of the U.S. economy. 

Index	Up/Down	% Change	Last
DJ Industrials	-61.9	-0.0014	44111
S&P 500	-30.77	-0.0049	6299
Nasdaq	-137.03	-0.0065	20916
Russell 2000	13.37	0.006	2225

This disappointing data point was the primary catalyst for the market’s reversal, sending stocks accelerating to the downside. The sell-off was most pronounced in the large-cap indices, particularly the Nasdaq, which has been the market’s leader. Small caps, however, showed notable resilience, managing to hold onto gains for the day, suggesting some investors are looking for opportunities outside the highly concentrated mega-cap tech space. 

Sector performance reflected this rotational dynamic. Defensive areas like Real Estate and Consumer Discretionary showed relative strength, while cyclicals and early leaders like Communications and Technology led the underperformers. Gold reversed its early losses to close higher as the weak data revived its safe-haven appeal, while oil prices continued their slide on demand concerns.

Economic Data

The key economic report yesterday was the July ISM Services PMI, which disappointed significantly and pointed to a near-stall in services sector activity. 

• ISM Non-Manufacturing (Services) PMI (July): Slipped to 50.1 (vs. 51.5 est., 50.8 prior). New Orders 50.3 (vs. 51.3 prior). Employment 46.4 (vs. 47.2 prior), lowest since March. 
• S&P Global US Services/Composite PMI (July Final): Composite revised higher to 55.1 (from 54.6 flash). Services PMI revised higher to 55.7 (from 55.2 flash). (Note: S&P and ISM PMIs continue to show significant divergence). 

Commodities, Currencies, and Treasuries 

Gold prices reversed early losses to finish in positive territory, with December futures settling up $8.30 (+0.24%) at $3,434.70 per ounce. The rebound was driven by renewed safe-haven demand and increased Fed rate cut hopes following the weak ISM services report. Crude oil prices fell for the fourth consecutive day, with the September WTI contract settling down $1.13 (-1.70%) at $65.16/bbl. 

Asset	Up/Down	Unit / % Change	Last
WTI Crude	-1.13	USD/bbl	65.16
Brent	-1.12	USD/bbl	67.64
Gold	8.3	USD/oz	3434.7
EUR/USD	-0.0002	USD	1.1568
USD/JPY	0.58	JPY	147.65
10-Year Note	0.006	%	0.04202

The decline was fueled by concerns that slowing economic growth will hurt demand, on top of planned OPEC+ production hikes. The U.S. dollar was little changed against a basket of currencies, while Treasury yields were also relatively stable after early fluctuations. The 10-year yield ended near 4.20%.

Looking Ahead 

The market will be keenly focused on the heavy slate of Q2 earnings reports due this evening and tomorrow morning, including from AMD, Uber, Snap, McDonald’s, and Disney. The results and guidance from these companies will provide crucial insights into the health of technology, consumer spending, and the broader economy. With the Fed in a blackout period, economic data and earnings will be the primary market drivers. Any new trade headlines could also quickly shift sentiment.