The Economy Is Booming, So the Market Indexes Fell. Go Figure.
Yahoo Finance ·
American business activity just hit a five-year high. Stocks fell on the news, which tells you everything you need to know about the market's relationship with the Federal Reserve right now. The Nasdaq Composite ( ^IXIC -1.31% ) dropped 1% as of 12:29 p.m. ET, one day after closing at a record. The S&P 500 ( ^GSPC -0.78% ) and the Dow Jones Industrial Average ( ^DJI -0.61% ) each fell 0.6%. Eighteen of the Dow's 30 components traded lower at this timestamp. S&P Global's flash composite Purchasing Managers' Index (PMI) rose to 58.4 in September from 56.0, the highest reading since July 2021. The industrial health metric is showing approximately 5% annualized growth. But the headline didn't tell the whole story. New orders hit their highest level since March 2022, work backlogs also passed a high set in the inflation-burdened spring of 2022, and the gauge of input prices jumped to 66.4, the highest since October 2022. In other words, the American economy is flashing signals last seen during a full-throated inflation crisis.
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