Key Takeaways
- U.S. main stock indices dropped to below two-week and one-month lows today, reflecting broader market concerns.
- The ISM Manufacturing PMI for July fell to 48.0, indicating a fifth consecutive month of contraction in the manufacturing sector, with employment also declining.
- U.S. consumer sentiment remained broadly negative in July at 61.7, despite a slight improvement in current conditions, while inflation expectations showed mixed signals.
- U.S. construction spending decreased by 0.4% in June, marking a continued slide, primarily driven by a decline in private residential construction.
- Raymond James increased price targets for Apple (AAPL) to $240 and AbbVie (ABBV) to $236, while Enbridge (ENB) CEO stated global oil demand is "really, really strong."
U.S. main stock indices experienced a notable decline today, falling to below their two-week and one-month lows. This downturn comes amidst a series of economic data releases painting a mixed, yet cautious, picture of the American economy.
The manufacturing sector continued its contraction in July, with the ISM Manufacturing PMI registering 48.0. This figure is lower than June's 49.0 and missed the estimated 49.5, marking the fifth consecutive month of contraction for the sector. The Employment Index within the ISM report also dropped further into contraction, falling to 43.4 from 45.0 in June, indicating ongoing challenges for factory payrolls. While the Prices Paid Index eased to 64.8 from 69.7, input prices continue to rise at a steep rate. New Orders, though still in contraction, saw a slight improvement to 47.1 from 46.4.
Meanwhile, the University of Michigan's Consumer Sentiment Index for July came in at 61.7, slightly below the 61.8 preliminary estimate and 62.0 forecast, but still an improvement from June's 60.7. This marks the highest sentiment level in five months, yet overall confidence remains weak and broadly negative. The Current Conditions component improved to 68.0 from 66.8, reaching its highest level since January. However, consumer expectations declined slightly to 57.7 from 58.6. Inflation expectations presented a mixed signal, with the 1-year outlook ticking up to 4.5% from a previous 4.4%, but remaining lower than the 5.0% expected in June. The 5-10 year inflation expectations continued their decline, settling at 3.4% from 3.6%, marking the lowest levels since February 2025.
In the construction sector, U.S. spending saw a 0.4% month-over-month decrease in June, totaling an annualized $2.136 trillion. This continues a recent slide in new building activity, with private construction spending declining by 0.5%. Private residential construction specifically saw a 0.7% decline, while public construction edged up by 0.1%.
Despite the broader economic headwinds, some companies received positive analyst revisions. Raymond James increased its price target for Apple (AAPL) to $240 from $230, maintaining an Outperform rating. Similarly, the firm raised its price target for AbbVie (ABBV) to $236 from $227, also keeping an Outperform rating, citing a solid Q2 performance. In the energy sector, the CEO of Enbridge (ENB) commented that "Global Oil Demand Is 'Really, Really Strong'," suggesting a positive outlook for the energy market despite broader economic concerns.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.