The Nasdaq slid 137.03 points (0.7 %) to 20,916.55, the S&P 500 fell 30.75 points (0.5%) to 6,299.19 and the Dow edged down 61.90 points (0.1%) to 44,111.74.

Wall Street faced a downturn amid renewed trade concerns following President Trump's remarks about imposing new tariffs on semiconductors, chips, and pharmaceuticals. He indicated tariffs on drug imports could reach up to 250%. Additionally, weak U.S. service sector data for July further weighed on investor sentiment.

The ISM said its services PMI edged down to 50.1 in July from 50.8 in June. While a reading above 50 still indicates growth, economists had expected the index to rise to 51.5. Stocks initially rose on the back of strong earnings reports, notably from software firm Palantir (PLTR). The company's shares jumped 7.9 % after it reported a nearly 50 % surge in second-quarter sales, driven by strong demand for its AI services.

Oil service stocks substantial moved upwards, resulting in a 3.5% surge by the Philadelphia Oil Service Index. Gold stocks saw significant strength amid a modest increase by the price of the precious metal, driving the NYSE Arca Gold Bugs Index up by 2.9%. Housing and transportation stocks too were notably strong while utilities and semiconductor stocks moved to the downside.

Asia-Pacific stocks moved mostly higher. Japan's Nikkei 225 Index climbed by 0.6% while China's Shanghai Composite Index advanced by 1%. The major European markets turned in a mixed performance on the day while the French CAC 40 Index edged down by 0.1%, the U.K.'s FTSE 100 Index crept up by 0.2% and the German DAX Index rose by 0.4%.

In the bond market, treasuries showed a lack of direction over the course of the session before closing roughly flat. Subsequently, the yield on the benchmark ten-year note which moves opposite of its price, edged down by less than a basis point to 4.19%.

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