Composite PMI Rises To 53.5; SP500 Tests Session Highs
On March 24, 2025, the S&P Global released compelling PMI reports, revealing noteworthy trends in the manufacturing and services sectors. The Composite PMI saw a significant uptick, now standing at 53.5, contrary to earlier predictions that anticipated a decline. This positive shift is primarily supported by a strong performance in the services sector.
Key Points
- Manufacturing PMI fell from 52.7 to 49.8, signifying a contraction in the sector.
- However, Services PMI soared from 51 to 54.3, exceeding expectations.
- The Composite PMI climbed from 51.6 to 53.5.
While the manufacturing sector struggles, the clarity of growth in services is striking. According to analysts, numbers below 50 indicate contraction, so the manufacturing sector’s PMI result raises some eyebrows. On the flip side, the services sector’s robust performance provides much-needed support for the Composite PMI.
Market Reactions
Following the release, the U.S. Dollar Index reacted positively, trying to settle above 104.30. This movement reflects traders' strong response to the stronger-than-expected Composite PMI report. Simultaneously, the SP500 managed to test session highs, indicating market confidence and bullish sentiment fueled by promising economic reports.
Summary
The economic environment appears mixed but promising. The decline in manufacturing might raise red flags; however, the remarkable services PMI shows consumer confidence and service sector growth. Additionally, with the Composite PMI's rise to 53.5, there is optimism for the month ahead.
Opinion & Analysis
S&P Global noted, “Near-term risks also seem tilted to the downside,” suggesting that while the services sector is thriving, the manufacturing sector’s pressure post-tariff front-running might culminate into challenges ahead. Still, today’s report allows for cautious optimism among traders and investors alike, particularly as the SP500 and broader markets react positively.
For a deeper understanding, check out our economic calendar for upcoming events that can further impact market movements.