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Market Turbulence: ISM Manufacturing PMI Plummets to 48.0, SP500 Hits Session Lows Amid Economic Downturn

ISM Manufacturing PMI Drops to 48.0; S&P 500 Tests Session Lows Amid Mixed Economic Signals

August 1, 2025, 14:16 GMT – By Vladimir Zernov

The report on August 1, 2025 presents data where numbers point to slow factory work and a mixed mood in the market. The ISM reading falls below 50 as factory tasks slow. The S&P 500 shows early signs of weakness.

ISM Manufacturing PMI Shows Contraction

The ISM report places the Manufacturing PMI at 48.0 in July, down from 49.0 in June. The index now stays below 50; a number that marks slow activity. New orders edged up from 46.4 in June to 47.1 in July but stayed in the slow zone. Production moved from 50.3 to 51.4. This shift hints that output holds some strength amid the slow trend.

S&P Global Manufacturing PMI Aligns with ISM Data

The final S&P Global Manufacturing PMI dropped from 52.9 in June to 49.8 in July. The change sends the figure into a below-threshold range. It matched the forecast near 49.5. This match ties back to worries over the weak state of manufacturing.

Consumer Sentiment Shows Slight Improvement

The University of Michigan’s Consumer Sentiment index climbed from 60.7 in June to 61.7 in July. The rise nearly met the forecast of 62. The University still notes that the overall mood on spending remains low. Inflation views limp too. A year-ahead feeling slipped from 5.0% to 4.5%, while long-run views moved from 4.0% to 3.4%. This change may guide the next Fed steps.

Market Reactions: Dollar, Gold, and Equities

Market moves followed the report. The U.S. Dollar Index dropped close to session lows, dipping under the 98.90 mark as traders saw the weak manufacturing news. Gold prices rose near session highs toward $3,350 per ounce. A drop in Treasury yields helped push gold higher. In stocks, the S&P 500 fell near 6,220 after the data came out. Traders stayed alert after the weak ISM and the new jobs report. The Non-Farm Payrolls number remains a key signal today as investors look for hints on what the Fed might do next.

Looking Ahead

Observers watch upcoming figures and Fed notes for more clues about the U.S. economy. The drop in manufacturing numbers mixed with falling inflation views creates a scene where growth and price control face a tough task. For traders and investors, the news shows that keeping a close watch on key numbers helps when saving strategies for a shifting economy.

About the author: Vladimir Zernov is an independent trader with over 18 years of experience on stocks, futures, forex, indices, and commodities. He studies both near-term moves and longer trends in the market.

Related Articles:

  • U.S. Job Growth Misses Expectations as Revisions Signal Labor Market Weakness
  • China Manufacturing Sector Contracts in July as Tariffs Bite: Hang Seng and AUD/USD Dip
  • Apple Beats Q3 Estimates With Strongest Revenue Growth Since December 2021

For more detailed economic data and forecasts, visit the FX Empire economic calendar and markets section.

China’s July Manufacturing Contraction Signals Economic Slowdown: Impact on Markets and Currency Dynamics

China’s Manufacturing Sector Contracts in July Amid Rising Tariff Pressures; Hang Seng Index and AUD/USD Experience Downward Pressure

By Bob Mason
Published: August 1, 2025, 02:27 GMT

China’s manufacturing shows a clear drop in July. Tariffs and weak demand affect production. The S&P Global China General Manufacturing PMI fell to 49.5 from 50.4 in June. The score sank below the neutral mark of 50 and missed the expected near-50 level. The drop puts extra strain on export-led companies and pushes down the Hang Seng Index and the value of the Australian dollar.

Key Highlights from July Manufacturing Data

  • Manufacturing PMI fell to 49.5, marking the first drop since late 2023.
  • New export orders shrank for the fourth month in a row, as US tariff risks add trade stress.
  • Both manufacturing output and new orders fell, with output decreasing for only the second time since October 2023.
  • Firms reduced jobs to manage costs in the face of weak demand.
  • Input costs climbed for the first time in five months when raw material prices rose.
  • Selling prices dropped even as input costs went up in a tough and competitive market.
  • Export charges went up as shipping and logistics costs increased.
  • Manufacturer mood improved a little but stayed below usual levels as they watched for better economic signs and government moves.

Expert Analysis on China’s Manufacturing Conditions

Jingyi Pan, Economics Associate Director at S&P Global Market Intelligence, said, "Production slowed because new orders grew more slowly. Local business helped keep some orders, but weak overseas demand held back overall sales."

On pricing issues, Pan mentioned, "Firms lacked the strength to keep prices high as input costs went up."

Market Reactions: AUD/USD and Hang Seng Index Movement

After the PMI report came out, the Australian dollar fell slightly from $0.64297 to near $0.64249 before a small rise to $0.64261. China plays a big role for Australia, and weaker demand from China brings risks. This shift may affect future moves by Australia’s central bank.

RBA Governor Michele Bullock noted, "Trade with China remains important. If China helps its economy with fiscal actions, Australia may feel less of the tariff impact."

The Hang Seng Index first climbed 0.18% to 24,819 before the news. It then fell to 24,745 after the report. At the time of reporting, it had ticked up slightly to 24,751, but it stayed lower overall as investors showed caution.

Outlook: Stimulus Measures or Further Economic Challenges?

Global investors keep a sharp watch on China’s weak export demand and trade issues with the US. Beijing may try to fix the slump with stronger fiscal steps to boost home spending.

If Beijing uses strong fiscal help, the AUD/USD and Hang Seng Index might rise. A weak response may keep hurting China’s trade-based sectors and nearby markets.

For traders, it is important to track changes in China’s trade policy and new fiscal measures. They will also watch upcoming economic reports and global news that can affect trade and currency values.

Related Stories

  • Apple Beats Q3 Estimates With Strongest Revenue Growth Since December 2021
  • U.S. Personal Income and Spending Tick Higher in June, Keeping Pressure on Fed Outlook
  • Inflation Rises Sharply on PCE Data—Will Fed Hold Off on Rate Cuts?

About the Author
Bob Mason is a financial journalist with over 28 years of experience covering global markets, including currencies, commodities, and equities. He specializes in European and Asian economic developments.

This article is for informational purposes only and does not constitute investment advice. Readers should conduct their own research or consult financial professionals before making investment decisions.

Apple Shatters Q3 Revenue Expectations with Surge in iPhone Sales and China Growth

Apple Reports Strongest Quarterly Revenue Growth Since December 2021, Surpassing Expectations

Apple Inc. reported strong fiscal third-quarter earnings. These earnings passed market estimates and marked the highest revenue jump since December 2021. The stock climbed 3% after the report, driven by solid iPhone sales and growing demand in China.

Strong iPhone Sales and China Market Recovery Fuel Earnings Beat

Apple earned $1.57 per share on $94.04 billion in revenue. This beat analyst predictions of $1.43 per share and $89.53 billion in total revenue. The iPhone division helped most. It grew by 13% year-over-year to reach $44.58 billion, well above forecasts. CEO Tim Cook noted that the new iPhone 16 quickly gained buyers, as many users switched from older models.

Mac sales also rose nearly 15% to $8.05 billion. New MacBook Air models, released shortly before the quarter began, helped this growth. Apple’s Services group—which covers iCloud, AppleCare, and the App Store—grew by 13% to $27.42 billion. This rise came as subscriptions and App Store purchases grew in the double digits.

Challenges in iPad and Wearables Segments

Some areas did not do as well. The iPad division dropped 8% to $6.58 billion even after a new budget model arrived in March. The wearables group, which covers Apple Watch and AirPods, fell 8.6% to $7.4 billion. These results fell short of many estimates and show a slower demand for these products.

The gross margin reached 46.5%, a rise from the expected 45.9%. This boost came as Apple kept strong pricing power and worked efficiently, even when the company paid near $900 million in tariff costs during the quarter.

Growth in Greater China and a Focus on AI Technologies

Sales in Greater China grew by 4% to $15.37 billion. This rise reversed earlier drops in this important market. CEO Tim Cook mentioned that government aid for some devices played a role in this gain.

On the innovation side, Apple confirmed its plans with artificial intelligence. Cook called AI “one of the most profound technologies of our lifetime” and noted that Apple bought around seven small AI companies this year. The company will add AI skills across its platforms and products.

What Analysts and Traders Should Watch Going Forward

Market watchers should follow Apple’s work with AI and any new company deals that may speed up product updates. Continued iPhone upgrades and a strong Services group will be key to keep growth steady. On the other hand, tariff costs and lower sales in hardware like wearables and iPads stay a risk. Apple’s future comments on demand and results in China will get close attention in future reports.

Apple’s latest quarterly numbers send a clear sign of recovery and strength amid global economic challenges. This positions the company well as it moves into the rest of 2025. — Written by James Hyerczyk, Technical Analyst and Market Educator

Why Diversification Matters in Investing

Introduction

Investing can be a powerful way to grow wealth, but it comes with risks. One of the best ways to manage those risks is through diversification—spreading your investments across different assets to reduce the impact of any single loss. This blog explains the concept of diversification, illustrates its benefits with real-world examples, and provides practical tips for diversifying within asset classes like stocks, bonds, and real estate. Understanding diversification can help you build a more resilient portfolio.

What Is Diversification?

Diversification means investing in a variety of assets so that poor performance in one area doesn’t devastate your entire portfolio. The idea is based on the principle that different investments react differently to market conditions. For example, when stocks decline during a recession, bonds often perform better because investors seek safer options. By holding both stocks and bonds, you can offset losses in one with gains in the other. Diversification also applies within asset classes—owning stocks in multiple industries or bonds from different issuers reduces the risk of a single failure impacting your returns.

Benefits of Diversification with Examples

Diversification can protect your portfolio from significant losses. Imagine an investor who put all their money into a single tech stock in early 2022. When tech stocks dropped over 30% that year due to rising interest rates, their portfolio would have suffered heavily. Now, consider a diversified investor with 50% in tech stocks, 30% in bonds, and 20% in real estate. While their tech holdings fell, bonds likely gained value, and real estate may have held steady, cushioning the overall impact. Historically, diversified portfolios—like those with a mix of stocks, bonds, and other assets—have shown lower volatility and more consistent returns over time, such as the 60/40 stock-bond portfolio averaging 8% annual returns with less risk than an all-stock portfolio.

How to Diversify Within Asset Classes

Effective diversification goes beyond just holding different types of assets—it also involves spreading investments within each asset class. For stocks, invest across industries like technology, healthcare, and consumer goods to avoid sector-specific downturns; for instance, if tech struggles, healthcare stocks might thrive due to steady demand. For bonds, mix government bonds (like U.S. Treasuries) with corporate bonds from various sectors, ensuring you’re not overly exposed to one issuer’s default risk. In real estate, consider residential, commercial, and industrial properties, or invest through REITs (Real Estate Investment Trusts) for broader exposure without directly owning property. This approach minimizes risk while maintaining growth potential.

Practical Steps to Start Diversifying

Begin by assessing your current investments to identify concentration risks—such as having too much in one stock or sector. Next, allocate your portfolio across asset classes based on your risk tolerance; a young investor might choose 70% stocks, 20% bonds, and 10% real estate, while someone nearing retirement might prefer 50% bonds, 40% stocks, and 10% cash. Use low-cost index funds or ETFs, like an S&P 500 ETF for stocks or a total bond market fund, to gain broad exposure easily. Finally, rebalance your portfolio annually to maintain your desired allocation, as market changes can shift your proportions over time.

Conclusion

Diversification is a proven strategy to reduce risk and improve the stability of your investment portfolio. By spreading your investments across and within asset classes, you can better navigate market ups and downs. To learn more about building a diversified portfolio, check out our videos at The Money Grower.