Stocks Are Getting Crushed, Bonds Flying Higher

ISM’s monthly gauge of the American services sector came in well below expectations, and stocks have been falling while bonds have been rising since the 10 AM release.

The S&P 500 is now down 1.4%, trading around 1670, while 10-year U.S. Treasury futures are up 0.4%, and the yield on the 10-year Treasury note is three basis points lower at 2.58%.

The headline index fell to 54.4 in September from August’s 58.6 reading, missing economists’ estimates for a smaller drop to 57.0 and indicating a significant slowdown in the pace of growth of the American services sector in September.

The employment sub-index dropped to 52.7 from 57.0. In a week where the release of the monthly jobs report is postponed due to a government shutdown, the number stands out.

The chart below shows the drop in the S&P 500.

The next chart shows 10-year Treasury futures.

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