Weak economic data undercut stocks Tuesday and raised concern about a serious slowdown. The Dow Jones industrial average eased 0.1 percent, the S&P 500 lost 0.5 percent, and the Nasdaq was down 0.7 percent. US Treasury yields rose, the dollar was mixed against major currencies while oil prices slipped.

Investors were surprised and dismayed by news that the Institute for Supply Management's services business index declined to 50.1 in July from 50.8 in June, rather than the expected uptick to 51.5. The report features declining new orders, falling employment, and rising prices, all under pressure from tariffs, an ugly picture after last week's unexpectedly weak jobs report.

Markets also reacted poorly to President Trump's latest unpredicted threats of huge secondary tariffs on India and China as a result of their purchases of Russian oil. The market continues to suffer from worries about politicization of the Federal Reserve and federal economic data collection.

Among sectors, Magnificent Seven stocks sagged after their gains Monday. Pharma, restaurants, cruise lines, chipmakers, software, communications/networking and entertainment stocks lagged. Best were road/rail, oil services, home builders and materials.

Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.

Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.