The Dow Jones (DJIA) has remained resilient following a disappointing economic update from the Institute for Supply Management (ISM) and reached a new all-time high of 46,977.60 on Friday.
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September’s Services Purchasing Managers’ Index (PMI) fell to 50.0 from 52.0, below the estimate of 51.7. The index measures the overall health of the services sector, including business activity, new orders, employment, and supplier delivery times. In addition, the Business Activity Index fell sharply to 49.9 from 55, registering the lowest reading since May 2020. A reading above 50 indicates expansion, while a reading below 50 signals contraction.
ISM Employment Index Remains in Contraction
Meanwhile, ISM’s Employment Index remained in contraction for the fourth consecutive month at 47.2, although it came out on top of the estimate of 46.6 and rose from 46.5 during the prior month.
“Employment continues to be in contraction territory, thanks to a combination of delayed hiring efforts and difficulty finding qualified staff,” said ISM Chair Steve Miller.
Despite the softening in services activity and ongoing employment weakness, investors remained optimistic, driven by strong earnings and hopes for future interest rate cuts. Tech and AI-related stocks have also helped lift market sentiment.
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