Quick Read – The ISM manufacturing index hit 55.6, a 4-year high across 7 straight months of expansion, giving the Fed room to tighten policy further. – S&P 500 profit margins reached a record 16.7% in Q2 2026, showing corporate America thriving and undermining arguments against…
ditional Fed tightening. – Firming CPI, rising energy prices linked to the Iran conflict, and a resilient economy shift the likely rate hike timeline from 2027 into 2026. – For most of this year, investors have obsessed over one question: when will the Federal Reserve finally begin cutting interest rates? Every inflation report, jobs release, and manufacturing survey has been dissected for clues
That scrutiny has only intensified since Federal Reserve Chair Kevin Warsh has made it clear the central bank intends to offer less forward guidance, forcing markets to rely more heavily on incoming economic data instead of Fed forecasts. While many investors still expect the next rate increase — if one comes at all — to happen in 2027, a major economic report released yesterday suggests that timeline may be too optimistic. Manufacturing Is Sending a Very Different Message The Institute for Supply Management’s (ISM) manufacturing index climbed to 55.6, its highest reading since May 2022.
More importantly, it marked the seventh consecutive month above the key 50 threshold that separates expansion from contraction. It shows instead of rolling over, the U.S. economy is gaining momentum. Normally, stronger economic growth is exactly what stock investors want to see.