ISM Manufacturing PMI Exceeds Analyst Expectations

Key Insights

• ISM Manufacturing PMI increased from 47.6 in August to 49 in September. 
• S&P Global Manufacturing PMI grew from 47.9 in August to 49.8 in September.
• Gold tested new lows as traders focused on stronger dollar and rising Treasury yields. 

On October 2, the Institute for Supply Management released ISM Manufacturing PMI report for September. The report indicated that ISM Manufacturing PMI improved from 47.6 in August to 49 in September, compared to analyst consensus of 47.7. Numbers below 50 show contraction.

New Orders Index increased from 46.8 in August to 49.2 in September, while Production Index grew from 50.0 to 52.5.

The Institute for Supply Management commented: “The U.S. manufacturing sector continued its contraction trend but at a slower rate, recording its best performance since November 2022 […] Companies are still managing outputs appropriately as order softness continues, but the month-over-month improvement in September is a clear positive.”

Today, traders also had a chance to take a look at the final reading of S&P Global Manufacturing PMI report for September. The report showed that S&P Global Manufacturing PMI increased from 47.9 to 49.8, compared to analyst consensus of 48.9.

Treasury yields are moving higher after the release of the better-than-expected Manufacturing PMI reports. Bond traders stay focused on the hawkish Fed.

U.S. Dollar Index tested new highs after the release of the reports as traders reacted to the developments in the bond markets.

Gold markets remain under strong pressure as high yields and strong dollar are bearish for precious metals. Currently, gold is trying to settle below the $1830 level.

SP500 settled near the 4290 level as traders reacted to PMI reports. Fed policy outlook is the key driver for stocks. It remains to be seen whether PMI reports will provide any support to major indices as Treasury yields are moving higher.

For a look at all of today’s economic events, check out our economic calendar.