Saeed Azhar, Kanchana Chakravarty and Sukriti Gupta
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By Saeed Azhar, Kanchana Chakravarty and Sukriti Gupta
NEW YORK (Reuters) -U.S. stocks ended mixed on Wednesday, with the benchmark S&P 500 flat, the technology-heavy Nasdaq Composite slightly up and the Dow Jones Industrial Average down as weak data revealed the economic toll taken by President Donald Trump's trade policies.
The services sector contracted in May for the first time in nearly a year, while businesses paid higher input prices, a reminder that the economy was still at risk of slowing growth and rising inflation. Early gains in the S&P 500 evaporated toward the close and trading volume was relatively light.
"Tariff impacts are likely elevating prices paid by services sector companies," said Jeffrey Roach, chief economist for LPL Financial.
The ADP National Employment Report showed U.S. private employers in May added the fewest number of workers in more than two years. Investors await Friday's nonfarm-payrolls data for more signs on how trade uncertainty is affecting the U.S. labor market.
Washington doubled tariffs on imported steel and aluminum to 50%, and Wednesday was also Trump's deadline for trading partners to make their best offers to avoid other punishing import levies from taking effect in early July.
Investors focused on tariff negotiations between Washington and trading partners, with Trump and Chinese leader Xi Jinping expected to speak sometime this week as tensions simmer between the world's two biggest economies.
"If we can't get to an agreement on China, the tariff battle will be a headline issue for many months to come and will have an impact on both domestic and international economies," said Phil Blancato, CEO of Ladenburg Thalmann Asset Management.
May saw the biggest monthly increases for the S&P 500 index and the tech-heavy Nasdaq since November 2023, thanks to a softening of Trump's harsh trade stance and upbeat earnings reports.
The S&P 500 remains more than 2% below record highs touched in February.
Barclays joined a slew of brokerages in raising its year-end price target for the S&P 500, pointing to easing trade uncertainty and expectations of normalized earnings growth in 2026.
The Dow Jones Industrial Average fell 91.90 points, or 0.22%, to 42,427.74, the S&P 500 gained 0.44 points, or 0.01%, to 5,970.81 and the Nasdaq Composite gained 61.53 points, or 0.32%, to 19,460.49.
Shares of Hewlett Packard Enterprise rose 0.8% as demand for artificial-intelligence servers and hybrid cloud segment helped second-quarter revenue and profit beat estimates.
