The expected hit from tariffs was less than anticipated in the S&P PMI manufacturing index, which actually edged up to 50.7 in the April flash, a two-month high, from 50.2 in the March final. The Econoday consensus saw the index slipping into modest contraction at 49.4 for the April flash.

The flash services PMI remained positive at 51.4, a two-month low, versus 54.4 in March, and versus the expected 52.5. The composite eased to 51.2 in the April flash, a 16-month low, from 53.5.

S&P said the survey showed 1-year expectations fell to one of the lowest levels since the pandemic. Prices received for goods and services rose at the fastest pace for a year, with"an especially steep increase reported for manufactured goods, linked to tariffs."

Trade worries are hitting now with the PMI manufacturing expected to contract at 49.4 in the April flash, down from 50.2 in the March final. Services is expected to continue expanding at 52.5 versus 54.4 in March.

The flash Composite Purchasing Managers' Index (PMI) provides an early estimate of current private sector output by combining information obtained from surveys of around 1,000 manufacturing and service sector companies. The flash data are released around 10 days ahead of the final report and are typically based upon around 85 percent of the full survey sample. The report tracks changes in variables such as new orders, stock levels, employment and prices across both manufacturing and services. Production is also tracked, defined as"production" for manufacturing and"output" for services. Results are synthesized into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) output versus the previous month and the closer to 100 (zero) the faster output is growing (contracting). The report also contains flash estimates of the manufacturing and services PMIs. The data are produced by S&P Global.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.