Breaking: US Markit Manufacturing PMI slumps to 36.9 vs. 38 expected

The economic activity in the US manufacturing sector is expected to contract at a strong pace in April with the IHS Markit's Manufacturing Purchasing Managers' Index (PMI) slumping to 36.9 in its advanced estimate from 48.5 in March. This reading came in worse than the market expectation of 38.

Further details of the flash report revealed that the Services PMI plunged to 27 from 39.8 and the Composite PMI fell to 27.4 from 40.9.

Commenting on the data, “the COVID-19 outbreak dealt a blow to the US economy of a ferocity not previously seen in recent history during April," said Chris Williamson, Chief Business Economist at the IHS Markit. "The deterioration in the flash PMI numbers indicates a rate of contraction exceeding that seen even at the height of the global financial crisis, with jobs also being slashed at a rate far exceeding anything previously recorded by the survey."

Market reaction

Wall Street's main indexes cling to early gains despite the weak PMI readings. As of writing the S&P 500 and the Nasdaq Composite were both up around 0.8% on the day. Meanwhile, the US Dollar Index continues to trade in a relatively tight range near the 100.50 handle.