US Stocks fall starting August lower amid earnings, data flood

US stocks fell Monday in a choppy start to August trading as Wall Street struggled to sustain July’s momentum. The S&P 500 and Dow Jones Industrial Average each fell roughly 0.3%, while the Nasdaq Composite held near breakeven.

Investors digest data released early in the session that showed manufacturing activity expanded at the slowest pace in more than two years. The Institute for Supply Management’s gauge of factory activity retreated to 52.8 from 53 a month earlier, marking the lowest level since June 2020.

Meanwhile, separate data from S&P Global showed a build-up in finished goods inventories slipped for the first time since October 2020.

Monday’s moves come after stocks capped a month of strong gains on Friday. In July, the benchmark S&P 500 index rallied 9.1%, fighting back from its worst start to a year since 1962. The Nasdaq Composite soared 12.3% to log one of its best months on record, and the Dow Jones Industrial Average rose 6.7% for the month.

Equities have reflected typical positive risk appetite with small-cap stocks outperforming large-caps, and the Nasdaq Composite beating the S&P 500. The rebound came amid expectations that recent signs of a slowing economy may prompt the Federal Reserve to scale back its interest rate hiking cycle in the fall.