The U.S. ISM Services PMI for June is scheduled for release on July 3 at 10 a.m. ET. Market consensus expects a slight rebound to 50.5, up from 49.9 in May — a return above the neutral 50 threshold would indicate an expansion in the services sector.
In May, the index dipped below 50 for the first time since June 2024, reflecting contraction. New orders fell sharply to 46.4, signaling weak demand. However, the prices index surged to 68.7, suggesting ongoing inflationary pressure, while employment barely held expansion at 50.7.
The upcoming data will likely influence both Fed policy expectations and market sentiment. A reading above expectations may signal resilience in services, while a downside surprise could revive concerns about economic slowdown and shift investor preference toward defensive assets.
After an upside surprise (92 events)
After a downside surprise (113 events):
Historical data suggests that ISM Services PMI surprises have limited short-term impact on equity returns. While direct correlation remains weak, there is potential for indirect effects via shifts in interest rate outlooks and investor sentiment over a one-month horizon.
