The Dow dropped 600 points amid weak manufacturing data and ahead of this Friday’s August U.S. jobs report that is expected to help determine whether the Federal Reserve cuts rates by 25 basis points or 50 at its meeting on September 18. The Institute for Supply Management (ISM) said its manufacturing PMI rose to 47.2 last month from 46.8 in July, which was the lowest reading since November. A PMI reading below 50 indicates contraction in the manufacturing sector, which accounts for 10.3% of the U.S. economy. The PMI remained below the 50 threshold for the fifth straight month but is above the 42.5 level that the ISM said over time indicates an expansion of the overall economy. This data comes as the Commerce Department reported that U.S. construction spending dropped 0.3% in July after being unchanged in June as higher mortgages and increased supply weighed on single-family homebuilding.
