Stock Market Update

[BRIEFING.COM] The major indices have bounced off session lows, but still show solid declines. The S&P 500 is 1.0% lower and the Nasdaq Composite sports a 1.4% decline.

The relative improvement coincided with Mexico's President Claudia Sheinbaum saying she had a "good call" with President Trump and he agreed to "pause tariffs for one month."

The January ISM Manufacturing Index checked in at 50.9% (Briefing.com consensus 49.1%) versus a downwardly revised 49.2% (from 49.3%) in December. The dividing line between expansion and contraction is 50.0%, so the January reading suggests manufacturing sector activity accelerated versus the prior month and returned to expansion territory.

The key takeaway from the report is that manufacturing sector activity overall moved into expansion territory for the first time after 26 straight months of contraction, underscoring an improved demand backdrop seen in the pickup in the new orders and employment indexes.

Total construction spending increased 0.5% month-over-month in December (Briefing.com consensus 0.2%) following an upwardly revised 0.2% increase (from 0.0%) in November. Total private construction was up 0.9% month-over-month while total public construction declined 0.5% month-over-month. On a year-over-year basis, total construction spending was up 4.3%.

The key takeaway from the report is that new single-family construction activity picked up despite rising interest rates.