ISM manufacturing PMI falls to 48.7, missing analysts' expectations

The ISM Manufacturing PMI report showed that economic activity contracted for the 18th time in the past 19 months, highlighting the difficult situation in the manufacturing sector.

The new orders index fell from 49.1 in April to 45.4 in May, while the production index fell from 51.3 to 50.2.

The Institute for Supply Management commented: “Demand remains elusive as businesses demonstrate a reluctance to invest due to current monetary policy and other conditions. […] Suppliers continue to have capacity, with improved delivery times and less severe shortages.

Today, traders also had the opportunity to take a look at the final reading of the S&P Global Manufacturing PMI report. The report showed that S&P's global manufacturing PMI improved to 51.3 in May from 50 in April, compared to analysts' consensus of 50.9.

The US Dollar Index tested session lows as traders reacted to the disappointing ISM Manufacturing PMI report. Currently, the US Dollar Index is trying to stabilize below the level of 104.25. Treasury yields are falling, which is bearish for the U.S. currency.

Gold rose above the $2,340 level as traders focused on falling Treasury yields and a weakening U.S. dollar.