Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news, and analysis.

Good afternoon. Today is Tuesday, August 5th, and I'm your host, Kim Khan. Our top story so far,

President Donald Trump said his administration is prepared to increase the tariffs it plans to impose on pharmaceuticals

up to 250%. That's significantly higher than the 200% he indicated just a few weeks ago.

But Trump said the levies will be smaller in magnitude initially before the increase up to 250%

eventually. We'll be putting an initially small tariff on pharmaceuticals, he said in a CNBC

interview, but in one year,

one and a half years maximum, it's going to go to 150%, and then it's going to go to 250% because

we want pharmaceuticals made in our country. Drugs, which have historically been immune to levies due to

public health impact, have become increasingly targeted as the administration revises U.S. trade policy.

On the economic front, the ISM Services Index edged down unexpectedly to 50.1 in July from 50.8

in June, missing the 51.5 consensus. But the July reading still marks the 12th time in the last

13 months, in which the index surpassed the 50% break-even point.

A print over 50 suggests expansion, while the sub-50 print indicates contraction.

Meanwhile, the U.S. international trade deficit in goods and services narrowed to $60.2 billion in June from $71.7 billion in the prior month compared with the $62.6 billion consensus.

Imports retreated to $337.5 billion in June from May's

$350.3 billion, which was revised from $350.5 billion. Meanwhile, exports stood at $277.3 billion in

June, barely budging from the earlier month's $278.6 billion, revised from $279 billion.

Wells Fargo economists say, if you're on the hunt for evidence on how the trade war is impacting the U.S. economy, the international trade data

might not show it yet. The U.S. trade deficit narrowed in June to the smallest in nearly two years.

This has resulted in some wacky effects on headline GDP growth, but the sharp narrowing in the

deficit is simply an

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