Stocks are lower today with the S&P500 and Nasdaq down about 0.5% each Once again, investors are fretting over the potential for interest rates staying higher for longer on the heels of the latest economic data.

Economic Data Highlights

• The ISM Services PMI rose to 54.5 in August, topping forecasts for 52.5, and the strongest growth in six months, well above forecasts of 52.5.

• The US trade deficit grew to $65 billion in July 2023 versus expectations for $68 billion, and down from a revised $63.7 billion in June, compared to market forecasts of a $68 billion gap.

-Exports rose 1.6% to a four-month high of $251.7 billion

-Imports grew 1.7% to $316.7 billion

• The US IBD/TIPP Economic Optimism Index rose to a five-month high of 43.2 in September, topping estimates of 41.1, and up from 40.3 in August. Despite the rise, it is still the 25 straight month in negative territory. The six-month outlook is still very negative for the U.S. economy even with the 3.1 point gain to 38.3.

All eleven S&P500 sectors are in the red with a flight back to the safe havens.  Consumer Discretionary, Health Care and Technology are the worst performers. Apple (AAPL) gave up 2% on news that China bans the use of iPhones for officials at central government agencies.

Breadth is decidedly negative, and the new 52 lows are mounting, especially on the Nasdaq.