Factories at 55.5, prices paid off the boil, and Wall Street bought the bounce

The Institute for Supply Management’s manufacturing index for October came in at 55.5, up from 54.5¹. Economists polled by Reuters had expected no change². It was the tenth month of expansion in a row. Production rose to 59.0, its highest reading since November 2021, and new orders edged up to 55.5 from 55.3¹.

The figure worth watching is prices paid. It eased to 75.2 from 77.9; economists had expected only 77.5, Reuters reported^1,2. That is still high: factories are paying more for their inputs, just a little less quickly than in September. Supplier deliveries slowed a touch further, to 59.1, and factory employment slipped to 52.4 from 52.7¹.

Wall Street took the news well. By 16:21 CET the Dow was up 1%, the S&P 500 0.6% and the Nasdaq 0.8%, Yahoo Finance reported, as chipmakers clawed back part of Friday’s sell-off³. Before the release, futures had already pointed higher, at +0.5% for the S&P and +0.8% for the Nasdaq⁴. Cheaper oil helped too; our Energy lead covers that story.

The survey has a catch. ISM says purchasing managers’ general mood worsened for a third month running. Only 34% of their comments were positive and 66% negative¹. Among the negative ones, 62% mentioned price swings, 41% longer lead times, 25% tariffs and 21% the Iran war¹. The numbers show orders arriving; the comments show the people filling them uneasy.

None of this moves the Federal Reserve much. It held its rate at 3.75–4.00% last Wednesday, and economists polled by Reuters still expect a rise in December². A prices index at 75.2 is a slower climb, not a descent. Nothing here is investment advice.