Services PMI Falls To 49.7; SP500 Tests Session Lows

On February 21, 2025, S&P Global released PMI reports for February. Manufacturing PMI increased from 51.2 in January to 51.6 in February, compared to analyst forecast of 51.5.

The Manufacturing PMI report showed that factory production increased at the steepest rate for 11 months. However, new order growth weakened.

Services PMI declined from 52.9 in January to 49.7 in February, compared to analyst consensus of 53. Numbers below 50 show contraction. The report highlighted the first contraction of the services sector in 25 months.

S&P Global commented: “Service providers commonly linked the dowturn in activity and worsening new orders growth to political uncertainty, notably in relation to federal spending cuts and potential policy impacts on economic growth and inflation outlooks.”

Composite PMI decreased from 52.7 in January to 50.4 in February, compared to analyst forecast of 52.7. The weakness of the services sector put material pressure on Composite PMI.

U.S. Dollar Index moved lower as traders reacted to the weaker-than-expected Services PMI report. Currently, U.S. Dollar Index is trying to settle below the 106.50 level.

Gold remained stuck near the resistance at $2930 – $2940 after the release of U.S. PMI data. From a big picture point of view, gold traders continue to take profits near historic highs.

SP500 declined below the 6100 level as traders focused on the weakness of the services sector.

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