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    U.S. S&P Global Manufacturing PMI exceeds forecasts with a value of 52.4

    by VT Markets
    /
    Feb 2, 2026
    The S&P Global Manufacturing PMI for the United States was at 52.4 in January, which is better than the expected 51.9. This shows a slightly stronger growth in the manufacturing sector than we thought. A PMI score above 50 indicates that the sector is expanding.

    Continued Economic Resilience

    With January’s strong S&P Global Manufacturing PMI of 52.4, we see a clear sign of ongoing economic strength. This level of growth suggests that demand in the economy is still strong as we enter the new year. Traders should view this not just as one number, but as more evidence that the expected economic slowdown isn’t happening yet. This report makes it harder for the Federal Reserve to decide on future monetary policies, meaning interest rate cuts in the near future are less likely. A similar situation occurred in early 2025, when strong data kept the Fed from changing rates during the second quarter, surprising many market watchers. Since core inflation is still around 2.8%, this PMI reading will support the committee members who advocate for caution. In the coming weeks, we expect the market to lower the chances of a rate cut in March, which is already happening. The likelihood of a cut by June has dropped from over 80% to just below 60% this week, according to the CME FedWatch Tool. Therefore, trading in SOFR futures and options should prepare for a “higher for longer” rate scenario.

    Impact on Markets and Currency

    For equity index options, this creates a mixed risk situation. A strong economy is good for corporate earnings, but if interest rates stay high, it could pressure valuations, especially in tech and growth sectors. We might consider using call spreads on the S&P 500 to benefit from modest growth while protecting against a value drop. This data also supports a positive outlook for the U.S. dollar. The U.S. Dollar Index (DXY) has reached a six-week high of 104.50, and if strong data continues, it could rise to the 106 level we last saw in late 2025. Thus, options that benefit from a stronger dollar against the Euro or Yen seem increasingly appealing. Create your live VT Markets account and start trading now.

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