Market Alert: ISM Services PMI Dips to 50.1 as SP500 Hits Session Lows – What This Means for Your Investments
ISM Services PMI Drops to 50.1, S&P 500 Tests Session Lows
By Vladimir Zernov | Published: August 5, 2025, 14:19 GMT
The U.S. services sector shows slower growth in July. The new report from the Institute for Supply Management (ISM) tells us that the Services PMI slipped from 50.8 in June to 50.1 in July. This decline went below the analyst forecast of 51.5 yet stays just above the 50 mark that separates growth from decline.
Key Metrics Reflect Slowing Momentum
The report gives these supporting figures:
- The New Orders Index fell from 51.3 to 50.3. This drop signals that demand slows down.
- The Employment Index sank from 47.2 to 46.4. This fall indicates that hiring remains weak.
These adjacent numbers suggest that the services part of the economy grows only slowly. At the same time, there are signs that business work and hiring share the strain.
Factors Influencing Services Activity
The report shows a few forces at work. Tariffs make supply chain costs higher and push up prices. Seasonal shifts and poor weather add to the soft numbers. Even with these pressures, the economy stays in expansion for a second month. This pattern shows that the sector holds on amid tough conditions.
Market Reactions: Equities, Dollar, and Gold
When the report came out, the market moved fast:
- The S&P 500 slid to near the session low as investors worry that slow services growth could affect corporate profits and the economic pulse.
- The U.S. Dollar Index stayed above 99.00 as it bounced back after earlier falls linked to weak payroll figures.
- Gold settled near $1,370 an ounce as a firmer dollar and rising Treasury yields keep gold prices in check.
Broader Economic Context
This new ISM report adds to signs that the U.S. economy faces a mixed scene. While the services sector grows slowly, the drop in new orders and lower hiring cast doubt on how strong this pace might be. Ongoing tariff matters and other forces make the road ahead less clear.
Investors and experts will watch upcoming reports and company results closely. They seek better clues on what comes next for the U.S. economy and the market.
About the Author:
Vladimir Zernov is a trader with more than 18 years of experience in stocks, futures, forex, indices, and commodities. His work focuses on predicting both short and long market trends.
For ongoing updates on economic data and market views, visit our Economic Calendar.
Disclaimer: This article is for informational purposes only and does not serve as financial advice or a pitch to buy or sell assets.
