Nasdaq Dips Over 100 Points Following Economic Data: Investor Sentiment Declines, Fear & Greed Index Moves To 'Neutral' Zone

The CNN Money Fear and Greed index showed some decline in the overall market sentiment, while the index moved to the “Neutral” zone on Tuesday.

U.S. stocks settled lower on Tuesday, with the Nasdaq Composite falling more than 100 points during the session.

Shares of Inspire Medical Systems, Inc (INSP). dipped more than 32% on Tuesday after the company reported worse-than-expected second-quarter GAAP EPS results and cut its FY25 guidance below estimates.

Multiple analysts downgraded the stock following the report. Pfizer Inc (PFE). reported better-than-expected second-quarter results and raised its FY?2025 adjusted EPS guidance above estimates.

Despite the macro drag, Palantir Technologies Inc. delivered a standout performance. The artificial intelligence-driven software company exceeded Wall Street’s revenue and earnings forecasts, sending its stock up around 8%.

On the economic data front, the US trade deficit shrank to $60.2 billion in June versus a revised $71.7 billion gap in the previous month and versus estimates of a $61.6 billion shortfall. The ISM Services PMI declined to 50.1 in July from 50.8 in the previous month, compared to estimates of 51.5.

Most sectors on the S&P 500 closed on a negative note, with communication services, information technology and utilities stocks recording the biggest losses on Tuesday. However, materials and consumer discretionary stocks bucked the overall market trend, closing the session higher.

The Dow Jones closed lower by 62 points to 44,111.74 on Tuesday. The S&P 500 fell 0.49% to 6,299.19, while the Nasdaq Composite dipped 0.65% to 20,916.55 during Tuesday's session.

Investors are awaiting earnings results from McDonald’s Corp. , Uber Technologies Inc. (UBER) and Walt Disney Co. (DIS) today.

What is CNN Business Fear & Greed Index?

At a current reading of 54.5, the index moved to the “Neutral” zone on Tuesday, versus a prior reading of 56.6.

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.

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