The Dow Jones (DJIA) opened Tuesday’s trading session in negative territory and has since traded lower on a concerning manufacturing update from the Institute for Supply Management (ISM).
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The ISM announced this morning that August’s manufacturing purchasing managers’ index (PMI) contracted for a sixth consecutive month. The index showed a reading of 48.7, missing the estimate of 48.9 but improving from 48.0 in July. A reading below 50 indicates contraction within the manufacturing industry while a reading above 50 signals expansion. It wasn’t all bad news, as the new orders sub-index rose to 51.4 from 47.1, reversing six consecutive months of contraction.
“In August, U.S. manufacturing activity contracted at a slightly slower rate, with new orders growth the biggest factor in the 0.7-percentage point gain of the Manufacturing PMI,” said Susan Spence, chair of the ISM’s survey committee. “However, since production contracted at a rate nearly equal to the expansion in new orders, the Manufacturing PMI increase was nominal.” Meanwhile, respondents of the survey warned that tariffs have disrupted planning and scheduling activities, resulting in a shrinking housing and trucking industry.
The weak manufacturing PMI contributed to the Atlanta Fed reducing its Q3 gross domestic product (GDP) estimate to 3.0% compared to 3.5% on August 29. The next update will be released on September 4.
The Dow Jones is down by 1.13% at the time of writing.
Which Stocks are Moving the Dow Jones?
Let’s pivot to TipRanks’ Dow Jones Heatmap, which illustrates the stocks that have contributed to the index’s price action.
Tech stocks are off to a poor start in September, with all six stocks trading lower. Nvidia (NVDA) is leading to the downside after Taiwan Semiconductor (TSM) announced that the U.S. would require U.S. export licenses for shipments of American chipmaking equipment to its main China facility, effective December 31.
Magnificent 7 member Amazon (AMZN) is taking a hit following reports of disappointing Prime Day new membership signups. There were 5.4 million new Prime sign-ups over a 25-day period between June and July, falling by 2% year-over-year. At the same time, Prime Day sales increased by 30% to $24.1 billion.
Elsewhere, three of the four industrial stocks are in the red while financial stocks are taking a tumble as well.
DIA Stock Moves Lower with the Dow Jones
The SPDR Dow Jones Industrial Average ETF (DIA) is an exchange-traded fund designed to track the movement of the Dow Jones. As a result, DIA is falling alongside the Dow Jones today.
Wall Street believes that DIA stock has room to rise. During the past three months, analysts have issued an average DIA price target of $500.55, implying upside of 10.95% from current prices. The 31 stocks in DIA carry 29 buy ratings, two hold ratings, and zero sell ratings.