US manufacturing activity index drops to 49.1%, amidst tariff war
Amidst the ongoing Sino-American trade war, a leading gauge of U.S. manufacturing activity fell into contraction territory last month.
For the first time during U.S. President Donald Trump's tenure, the Institute for Supply Management's manufacturing index dropped to a reading of 49.1% in August - from 51.2% in July. The reading also came in lower than the 51.5% that economists had projected for August.
Any reading below the 50% level for the above-mentioned index is an indication of contraction in manufacturing activity.
Manufacturing accounts for 12% of U.S. gross domestic product (compared to consumer spending share of around 70%). The manufacturing survey should not typically signal a recession in the overall economy until readings fall below 42.9%, according to the institute.
While much of the U.S.-China tariff war narrative apparently centers around the objective of boosting U.S. industries, the decline in U.S. manufacturing activity could potentially imply headwinds to U.S. producers from rising tariff-induced costs of buying inputs/materials.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
DIA in upward trend: price may jump up because it broke its lower Bollinger Band on September 16, 2026
DIA may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options. In 35 of 41 cases where DIA's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued upward trend are 85%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. 43 of 52 cases where DIA's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 83%.
Following a +0.69% 3-day Advance, the price is estimated to grow further. Considering data from situations where DIA advanced for three days, in 303 of 359 cases, the price rose further within the following month. The odds of a continued upward trend are 84%.
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on September 08, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on DIA as a result. In 66 of 83 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 80%.
DIA moved below its 50-day moving average on September 08, 2026 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for DIA crossed bearishly below the 50-day moving average on September 14, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 11 of 14 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 79%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where DIA declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 77%.
The Aroon Indicator for DIA entered a downward trend on October 05, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
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