Pallade Veneta - US data deflates stocks rebound

Meanwhile oil prices retreated further after US President Donald Trump renewed his threat to raise tariffs on India over its purchases of Russian crude.

Wall Street's main stock indices had opened higher Tuesday before turning lower. European markets ended mixed, with Paris dipping into the red.

Global stocks had jumped on Monday, recovering ground lost after data released on Friday showed weakness in the US jobs market, raising concerns that the world's biggest economy is in worse shape than previously thought.

The rebound was fuelled by healthy company earnings and by bets that a slowing US economy would prompt the Federal Reserve to cut interest rates in September.

Lower interest rates are positive for stocks as companies can borrow at better rates, as can consumers.

Despite pressure from Trump, the Fed has said it will rely on the latest data on the inflation outlook to make its decision.

Data released Tuesday showed that modest growth in the US services sector pretty much evaporated in July, with companies reporting increases in prices due to tariffs that Trump has imposed on US trading partners.

"The 50.1 headline reading was more than one whole point below 51.5 expected and suggests growth in the dominant services sector is stalling," said City Index and FOREX.com analyst Fawad Razaqzada.

A reading above 50 percent indicates growth.

He pointed to "alarming" details in the report, such as an unexpected rise in prices paid by companies.

This "points to inflationary pressures building into the dominant services sector of the economy, making it difficult for the Fed to justify cutting rates," said Razaqzada.

CME Group's FedWatch tool still showed investors have largely priced in two interest rate cuts -- in September and October -- and see another one as possible in the third and final Fed meeting this year in December.

Some analysts were sceptical of the chances of rate cut, however.

"I continue to believe the Fed will not reduce rates at all this year given rising inflation caused by tariffs and a relatively stable unemployment rate," said Lazard chief market strategist Ronald Temple.

Trump's fresh tariffs on dozens of US trade partners are set to kick in on August 7, almost one week later than planned.

Swiss leaders flew to Washington on Tuesday in a last-ditch effort to avoid a hefty 39-percent tariff.

Meanwhile, the European Union on Tuesday announced the suspension of its retaliatory tariffs on US goods worth 93 billion euros ($107 billion) after Brussels struck a deal with Washington last month.

Trump on Tuesday renewed his threat to impose tariffs on imported pharmaceuticals of up to 250 percent, although he said the tariff would initially start small to allow companies time to move production to the United States.

Investors shrugged off the threat, with share prices of European pharmaceuticals, which have announced major investments to build manufacturing sites in the US, mostly higher.

Trump also indicated that an announcement of tariffs on semiconductors -- key to all electronics from smartphones to AI datacentres -- could come as soon as next week.

Shares in AI chipmaker NVIDIA were down 1.9 percent in midday trading.

- Key figures at around 1530 GMT -

New York - Dow: DOWN 0.3 percent at 44,034.25 points

New York - S&P 500: DOWN 0.5 percent at 6,298.16

New York - Nasdaq Composite: DOWN 0.5 percent at 20,941.95

London - FTSE 100: UP 0.2 percent at 9,142.73 (close)

Paris - CAC 40: DOWN 0.1 percent at 7,621.04 (close)

Frankfurt - DAX: UP 0.4 percent at 23,846.07 (close)

Tokyo - Nikkei 225: UP 0.6 percent at 40,549.54 (close)

Hong Kong - Hang Seng Index: UP 0.7 percent at 24,902.53 (close)

Shanghai - Composite: UP 1.0 percent at 3,617.60 (close)

Euro/dollar: UP at $1.1581 from $1.1573 on Monday

Pound/dollar: UP at $1.3300 from $1.3285

Dollar/yen: UP at 147.41 yen from 147.08 yen

Euro/pound: DOWN at 87.05 pence from 87.11 pence

West Texas Intermediate: DOWN 1.4 percent at $65.34 per barrel

Brent North Sea Crude: DOWN 1.4 percent at $67.83 per barrel

burs-rl/gv

M.Jacobucci--PV