*

Caterpillar ( CAT ) profit falls on weak equipment demand, tariff

hit

*

July's ISM nonmanufacturing PMI slipped to 50.1

*

Indexes: Dow down 0.1%, S&P 500 down 0.4%, Nasdaq down

0.5%

(Updates to afternoon trading)

By Caroline Valetkevitch

NEW YORK, Aug 5 (Reuters) - U.S. stocks were down

slightly on Tuesday as investors weighed the impact of tariffs,

with U.S. President Donald Trump saying the U.S. could impose a

"small tariff" on pharmaceutical imports before increasing the

rate subsequently.

Investors digested comments from several companies on

tariffs. Shares of KFC ( YUM ) parent Yum Brands ( YUM ) were down 4.8%

after the company missed estimates for the second quarter, as

steep trade duties restricted consumer spending. Caterpillar ( CAT )

warned of an up to $1.5 billion hit in 2025, but its

shares were up 0.2%.

Trump also signaled an announcement on tariffs on

semiconductors and chips in the "next week or so."

The S&P 500 technology index was down 0.3% and the

Philadelphia Semiconductor Index was down 0.6%.

"Today's market action reflects investors that are merely in

pause mode," said Terry Sandven, chief equity strategist at U.S.

Bank Wealth Management in Minneapolis, Minnesota.

While the backdrop for equities remains constructive for the

year, "clearly near-term there are some headwinds," he said,

including elevated valuations given recent record highs in the

S&P 500.

"The impact of tariffs remains a work in progress," he

noted.

Earlier in the day, data showed ISM's nonmanufacturing

purchasing managers index (PMI) slipped to 50.1 last month from

50.8 in June, as little changes in orders and weaker hiring,

alongside rising input costs.

The Dow Jones Industrial Average fell 54.49 points,

or 0.12%, to 44,120.40, the S&P 500 lost 24.25 points, or

0.38%, to 6,305.69 and the Nasdaq Composite lost 106.49

points, or 0.51%, to 20,947.19.

Shares of Marriott International ( MAR ) were down 0.2%

after it cut its annual forecast on slowing travel demand.

Stocks sold off on Friday after a disappointing July jobs

data and sharp downward revisions to prior months, but indexes

bounced back on Monday.

Advancing issues outnumbered decliners by a 1.12-to-1 ratio

on the NYSE. There were 141 new highs and 59 new lows on the

NYSE.

On the Nasdaq, 1,989 stocks rose and 2,476 fell as declining

issues outnumbered advancers by a 1.24-to-1 ratio.

(Additional reporting by Nikhil Sharma and Pranav Kashyap in

Bengaluru; Additional reporting by Twesha Dikshit; Editing by

Maju Samuel and Aurora Ellis)