US May PMIs Expected to Show Stable Services, Soft Manufacturing – S&P Global

S&P Global PMI data under market scrutiny as Fed policy expectations intensify

S&P Global will publish its flash Purchasing Managers’ Index (PMI) readings for May on Thursday, with markets closely watching the results for insight into the health of the US economy and future Federal Reserve actions. The PMIs cover the manufacturing, services, and composite sectors, and are considered leading indicators of economic momentum.

Forecasts suggest a mild slowdown in manufacturing activity, while the services sector is expected to show continued resilience. In April, the Manufacturing PMI slipped to 50.2, just above the contraction threshold, while the Services PMI declined to 50.8, and the Composite PMI eased to 50.6.

Market participants expect similar trends in May, with analysts predicting that manufacturing may soften further but services will remain in expansion territory (above 50). These results will likely influence expectations around a potential 25 basis-point interest rate cut by the Federal Reserve in September.

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, previously noted that slowing business activity, rising inflationary pressures, and weakening optimism all point to mounting pressure on the Fed to ease monetary policy later this year.

Traders are also keeping a close eye on EUR/USD, which is trading near a three-year high around 1.1500, partly driven by diverging economic signals between the US and Eurozone.