The S&P 500 (SPX) continues to trade in positive territory after the U.S. S&P Global Flash Composite Purchasing Managers’ Index (PMI) came in at a 3-month low.
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In September, the Flash Composite PMI fell to 53.6 from 54.6 and also missed the expectation of 54.0. A reading above 50 indicates economic expansion, while a reading below 50 indicates contraction. The Flash Manufacturing PMI at 52.0 was in line with the estimate, while the Flash Services PMI of 53.9 fell short of the expectation for 54.0.
Lower Interest Rates Boost Sentiment
On the bright side, business sentiment saw an uptick amid hope for lower rates, which could help offset tariff impacts. Last week, the Fed cut interest rates by 25 bps.
“While growth expectations across both manufacturing and services also continue to be dogged by concerns over the political environment, and especially tariffs, September encouragingly saw business sentiment improve in part due to the anticipated beneficial impact of lower interest rates,” said Chris Williamson, Chief Business Economist at S&P Global Market Intelligence.
In addition, Composite PMI for the third quarter was the strongest since the fourth quarter of 2024 and has remained above 50 for 32 consecutive months.
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