The Impact of ISM Services PMI on Financial Markets: A Comprehensive Overview

ISM Services PMI (Purchasing Managers' Index) is a monthly survey of purchasing managers in the services sector conducted by the Institute for Supply Management (ISM). The purpose of the survey is to provide an indicator of economic activity in the U.S. services sector.

The ISM Services PMI measures various aspects of the services industry, including new orders, employment, supplier deliveries, inventories, prices, business activity, and new export orders. The survey results are compiled into an index, which reflects the percentage of respondents reporting an increase or a decrease in activity compared to the previous month.

A reading above 50 indicates an expansion in the services sector, while a reading below 50 indicates a contraction. The ISM Services is a leading economic indicator, as it provides an early signal of changes in business activity in the services sector. The survey is based on a representative sample of purchasing managers from various industries in the services sector, including finance, healthcare, transportation, and retail.

ISM Services PMI has a significant impact on the markets. A higher than expected reading of the ISM Services PMI is generally considered bullish for the financial markets, as it suggests that the services sector is expanding and the overall economy is growing. The inverse is typically the case when the reading is lower than expected.

The previous ISM Services PMI came in relatively close to expectations, however the Dow Jones Industrial Average (DJIA) ranged over 150 points during the 15 minute span of the news release on March 1, 2023.Traders should exercise a high level of caution when trading during the release of this data, which is scheduled for Monday, April 5 at 10:00 AM EST.