05:00 PM EDT, 07/01/2025 (MT Newswires) -- The Nasdaq Composite and the S&P 500 fell from record levels as investors weighed Federal Reserve Chair Jerome Powell's latest remarks and June manufacturing data.

The Nasdaq retreated 0.8% to 20,202.9, while the S&P 500 fell 0.1% to 6,198, after two consecutive days of record closing highs. The Nasdaq's decline was the first in seven days, while the S&P 500 dropped after three days of gains.

The Dow Jones Industrial Average rose 0.9% to 44,494.9, up for the fourth session in a row.

Barring communication services and technology, all sectors were in the green, led by materials.

Powell indicated Tuesday that the Federal Open Market Committee would have lowered its benchmark lending rate by now had President Donald Trump not announced tariffs, CNBC reported.

Last month, the FOMC kept interest rates unchanged for a fourth consecutive meeting. Trump has repeatedly called on the Fed to reduce rates.

"In effect, we went on hold when we saw the size of the tariffs and essentially all inflation forecasts for the (US) went up materially as a consequence of the tariffs," Powell reportedly said Tuesday.

Markets are currently pricing in probabilities of 21% and 74% for a 25-basis-point rate reduction in July and September, respectively, according to the CME FedWatch tool.

US Treasury yields were higher, with the two-year rate jumping 6.2 basis points to 3.78% and the 10-year rate adding 2.1 basis points to 4.25%.

Results of two surveys released Tuesday painted a mixed picture of the US manufacturing sector for June, with Institute for Supply Management data showing a fourth straight monthly contraction and S&P Global ( SPGI ) indicating faster expansion.

"The ISM prices paid remains very elevated at 69.7 versus the break-even level of 50, suggesting the tariff-induced price hike story remains an important near-term theme for the Fed," ING said in a note. "At the margin it diminishes the probability of a July Fed rate cut - which looked pretty remote anyway."

The ISM survey's details point to "continued struggles" for domestic manufacturers, Oxford Economics said. "Demand uncertainty and bartering over who foots the tariff bill are leading to delays or cancellations in orders," the firm wrote. "Until tariff policies and geopolitical issues fade, this is unlikely to change."

US job openings unexpectedly rose in May, the Bureau of Labor Statistics reported Tuesday. Government data are expected to show Thursday that the US economy added 120,000 nonfarm jobs last month, compared with a 139,000 gain reported for May, according to a Bloomberg-poll consensus.

West Texas Intermediate crude oil was up 1% at $65.74 a barrel.

In company news, Tesla (TSLA) shares fell 5.3%, among the worst performers on the S&P 500. The electric vehicle maker's investors are concerned that renewed tensions between Chief Executive Elon Musk and Trump could pose regulatory headwinds to the company's autonomous-driving journey, Wedbush Securities said in a client note.

The US leader suggested that the Department of Government Efficiency, which Musk led early in Trump's administration, should review any federal grants to Tesla and Musk's SpaceX. That came after Musk, Trump's former ally, stepped up criticism of the president's tax and spending bill.

The megabill bill passed in the Senate in a 51-50 vote Tuesday, proceeding to the House, which is expected to vote on the bill this week, CBNC reported.

AMC Entertainment ( AMC ) shares slumped 9% after the movie theater company said it secured more than $200 million in new funding as it looks to refinance debt maturing next year.

Packaging Corp. of America ( PKG ) agreed to purchase the containerboard business of Greif ( GEF ) for $1.8 billion in cash. Packaging Corp. shares climbed 7.6%, among the top performers on the S&P 500, while Greif ( GEF ) jumped 7.4%.

Gold was up 1.3% at $3,350 per troy ounce, while silver edged up 0.2% to $36.23 per ounce.