NEW YORK, September 24 — The Nasdaq Composite fell 1% on Wednesday, September 23, one day after closing at a record high, as a five-year high in US business activity failed to lift stocks. The S&P 500 and the Dow Jones Industrial Average each dropped 0.6% by 12:29 p.m. ET, according to the market data cited in the report. Eighteen of the Dow’s 30 components traded lower at that timestamp — broad-based selling, not a narrow pullback.
The trigger, or at least the backdrop, was S&P Global’s flash composite Purchasing Managers’ Index, which rose to 58.4 in September from 56.0 in August. That is the highest reading since July 2021.
The PMI is a survey-based measure of business activity; readings above 50 indicate expansion, and the September flash figure pointed to approximately 5% annualized growth in industrial health.
Strong data, weak tape
The divergence is the story. A gauge of American business activity hit a five-year high, and the major indexes fell anyway. The source material frames the central tension plainly: strong economic data can be negative for stocks when investors fear it will keep the Federal Reserve from cutting interest rates.
The article’s description notes that business activity just hit a five-year high while Treasury yields hit a 19-year high, and asks which one stocks cared about. The market reaction suggests stocks cared more about the yield implications than the growth signal.
The Nasdaq’s 1% decline came one day after a record close — a sharp reversal. The S&P 500 and Dow each lost 0.6%.
The fine print in the PMI
The headline PMI number did not tell the whole story. New orders — a key forward-looking component of the survey — hit a level that the available excerpt does not fully specify. That caveat matters for anyone reading the 58.4 print as an unambiguous all-clear.
The report was published by S&P Global, the financial information and analytics company, whose US operations are part of a multinational firm with a long history in credit ratings, market data, and economic research. The article was written by Anders Bylund, a contributing Motley Fool media and technology analyst who covers semiconductors, cloud computing, internet infrastructure, quantum computing, and streaming media.
Bylund holds a bachelor’s degree in English and a master’s degree in library and information sciences from Florida State University. The Motley Fool, founded in 1993 and headquartered in Alexandria, Virginia, publishes the article on its website, fool.com, under the headline “The Economy Is Booming, So the Market Indexes Fell. Go Figure.” The piece is categorized under investing and market news on the site, which covers stock market news, market movers, tech stock news, market trends, crypto news, and personal finance topics including retirement and credit cards.
What to watch
The next test is whether the yield pressure that dragged the indexes lower on Wednesday persists, and whether the Fed’s next policy signal confirms or complicates the rate-cut expectations now driving the tape. Investors will note the new orders detail when the full PMI report lands. For now, the figure that matters is 58.4 — and the market’s answer to it was to sell.
