The S&P 500 is currently reflecting a mixed economic landscape, as recent PMI data highlights contrasting performances across sectors. The Manufacturing PMI has dropped to 48.3, signaling ongoing contraction, while the Services PMI has surged to 58.5, its highest level since 2021. This divergence underscores a manufacturing sector under pressure, contrasted by robust growth in services. Despite the strong services activity, employment indices show only modest expansion, with the services employment index at 50.7 and manufacturing at 50.2. Citi analysts express caution, pointing to potential labor market weakening and structural factors such as modest rent inflation and slowing wage growth. Additionally, disinflationary trends in services suggest that inflation may ease further, adding another layer of complexity to the economic outlook.
The iShares Core S&P 500 ETF (IVV) has experienced a modest increase, rising 0.46% to $610.01 as of 12:00 PM on Monday, December 16.