Major indices are moving off their mornings’ highs as investors rotate from high beta to low beta names. The ISM Services PMI results at 10 A.M. EST sparked an initial move lower (more below).

Four sectors are in the green. The Materials (XLB) sector is leading the way up, while Utilities (XLU) are lagging.

Lower beta chemical companies make up many of the top advancers in Materials, and are benefiting from a favorable earnings’ reaction to Dupont de Nemours (DD).

Notably, the top 3 advancers in the S&P 500 are all defense stocks, which are benefiting from favorable earnings releases.

Trump made comments on tariffs during an interview with CNBC this morning, indicating that semiconductor and pharmaceutical tariffs will be announced within the next week or so. He indicated pharmaceutical tariffs will initially start small, but within 1 – 1.5 years, they will go to 150%.

Additionally, he made comments that within the next 24 hours he will raise tariffs on India substantially, due to their importation of Russian oil.

On the economic front, ISM Services PMI fell to 50.1 in July from 50.8, missing forecasts of 51.5. Prices moved higher, while other metrics fell.

Notable Changes:

• Business Activity: 52.6 from 54.2
• Employment: 46.4 from 47.2
• New orders: 50.3 from 51.3
• Prices: 69.9 from 67.5

On the other hand, S&P Composite PMI was revised up to 55.1 in July from the preliminary reading of 54.6. This was primarily due to an upward revision in S&P US Services PMI to 55.7 from the preliminary reading of 55.2.

Atlanta Fed's GDPNow rose to 2.46%, up from 2.15% on August 1st.

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