Stock market today: Nasdaq, S&P 500 futures plunge as global chip sell-off spurs AI doubts

US business activity in June slightly outperformed expectations, according to preliminary data released by S&P Global on Tuesday.

S&P’s US manufacturing purchasing managers’ index (PMI), which measures business conditions in the manufacturing sector, including production, new orders, employment, and inventories, came in at 55.7 — a more than 4-year high —against estimates of 54.6.

The manufacturing reading also grew from May’s 55.1 reading. Readings above 50 signal growth, while those below 50 signal contraction.

Looking at the other side of the economy, S&P’s US services PMI came in at 51.3 — a four-month high — exceeding estimates of 51.1 and the previous month’s 50.7. Totaling up activity across both manufacturing and services, S&P ‘s US composite PMI read at 52.2 — a five-month high — against estimates of 52.1 and a previous reading of 51.5.

Taken together, the readings mark the third month in a row of growth for US business economic activity, per S&P’s data, even as the rate of growth remains weaker than the start of the year before the war in Iran began.

The numbers, S&P noted, once more show an “unbalanced economy, as sluggish demand for services contrasted with historically strong growth in demand for manufacturing goods” — though the latter category was supported by stock building and supply issues.

“Brighter news out of the Middle East has helped restore some confidence among US businesses in June, though the overall rate of economic growth signalled by the flash PMI survey remains relatively sluggish compared to that seen earlier in the year in the lead up to the conflict,” said Chris Williamson, Chief Business Economist at S&P Global Market Intelligence.

“The survey signals that current output levels are consistent with the economy struggling to grow much faster than a 1% annualized rate in the second quarter.”