This Weekly U.S. Market Update covers the most important economic, labor, and geopolitical developments shaping global markets this week.
📉 U.S. Manufacturing PMI remained in contraction, falling to 47.9, the lowest level of 2025, as production and inventories weakened despite minor improvements in new orders.
📈 U.S. Services PMI strengthened sharply, rising to 54.4, the highest level of the year, driven by business activity, new orders, and a return to employment growth—highlighting a growing divergence within the U.S. economy.
👥 Consumer Sentiment improved for the second consecutive month, reaching its highest level since September 2025, though elevated inflation expectations and labor market uncertainty continue to weigh on confidence.
💼 Non-Farm Payrolls (NFP) came in below expectations, with downward revisions to previous data reinforcing signs of a cooling labor market. Unemployment remained steady at 4.4%, signaling stability but limited momentum.
📊 Initial Jobless Claims rose slightly to 208K, while the 4-week moving average dropped to its lowest level since April 2024—suggesting resilience with mild softening beneath the surface.
🌍 Geopolitical Developments: Heightened uncertainty emerged after a major U.S. operation in Venezuela, escalating regional tensions and raising concerns over oil supply disruptions and broader market volatility.
Frequently Asked Questions
Why is U.S. manufacturing still in contraction?
U.S. manufacturing remains in contraction because production and inventories continue to weaken. Although new orders and backlogs showed slight improvement, overall demand is still insufficient to support expansion, keeping the ISM Manufacturing PMI below the 50 level.
What is driving the strength in U.S. services activity?
U.S. services activity strengthened due to solid gains in business activity, new orders, and a return to employment growth. However, easing price pressures and contracting order backlogs suggest the expansion is moderate rather than strong.
What does the latest NFP report say about the U.S. labor market?
The latest Non-Farm Payrolls report came in below expectations, with downward revisions to previous data. While job growth remains positive and unemployment is steady, the figures point to a cooling labor market rather than a strong acceleration.
Why are jobless claims important for market analysis?
Initial jobless claims are a leading indicator of labor market health. The recent slight increase in claims, combined with a falling 4-week average, suggests labor market stability with mild softening but no clear signs of deterioration.
How could geopolitical tensions in Venezuela affect global markets?
Rising geopolitical tensions involving Venezuela increase uncertainty around oil supply and energy exports. This can lead to higher market volatility, especially in oil prices, currencies, and risk-sensitive assets.
