How Does ISM Svc PMI Affect Stocks & ETFs?

The ISM Services PMI (formerly Non-Manufacturing) covers the services sector, which represents roughly 70% of the US economy. Like the manufacturing PMI, readings above 50 indicate expansion. It includes sub-components for business activity, new orders, employment, and prices.

Since services dominate the US economy, this index arguably matters more than manufacturing PMI for the overall growth picture. Services inflation has been the 'sticky' component keeping the Fed cautious, making the prices paid sub-index especially market-moving.