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Factory production line illustrating US manufacturing activity
Photo: Reuters via Investing.com

ISM Prices Paid Index Jumps to 77.9 on Inflation Fears

Institute for Supply Management via PR Newswire2 min read5 sources

Why did the ISM prices paid index jump today?

The ISM manufacturing prices-paid index jumped to 77.9 on Thursday from 71.1 in August, well above the 72 forecast, as pricier steel, aluminum and tariff-hit imports stoked inflation fears.

Key numbers

ISM prices-paid index77.9+6.8 pts vs August
Economists' forecast72.0Actual beat it by 5.9 pts
ISM manufacturing PMI54.5-0.1 vs August; forecast 55.0
ISM new orders index55.3+1.6 vs August
10-year Treasury yield (session high)5.34%Highest since 2002
S&P 500 (midday)7,632-0.26%

What happened

The ISM manufacturing prices-paid index jumped to 77.9 on Thursday from 71.1 in August, well above the 72 forecast, as pricier steel, aluminum and tariff-hit imports stoked inflation fears. The index tracks what factories pay for materials, and it has now shown rising costs for 24 straight months. Overall factory activity barely changed at 54.5, just under the 55.0 forecast, but a reading above 50 still means growth. Meanwhile, the 10-year Treasury yield touched 5.34%, its highest since 2002, and by midday the S&P 500 was down 0.26%.

Why it matters

The ISM prices-paid index matters because it shows what U.S. factories pay for materials, an early clue to whether prices could rise for shoppers. A reading of 77.9, far above the 50 dividing line, means costs are rising quickly. If inflation stays high, bond investors demand higher returns (yields), which can make mortgages and business loans costlier. Stocks slipped as those yields hit their highest level since 2002.

Who this affects

Marketbearish
Medium impact
Bond holders and stock investors face pressure from higher yields.
Companybearish
Medium impact
Factories pay more for materials, squeezing their profit margins.
Competitorsbearish
Low impact
Other manufacturers face the same cost squeeze.
Industrymixed
Medium impact
Factory growth continues, but rising costs may reach shoppers.

S&P 500 vs Dow Jones, Nasdaq Composite

S&P 500SPX7,632-0.26%—
Dow Jones Industrial AverageDJI50,623-0.56%—
Nasdaq CompositeIXIC26,801-0.22%—

As of 2026-10-01

How we got here

  1. ISM reports September prices-paid index at 77.9, up from 71.1 in August.

  2. 10-year Treasury yield touches 5.34%, its highest level since 2002.

  3. By midday, S&P 500 is down 0.26% and the Dow is down 0.56%.

What to watch

  • Whether the 10-year Treasury yield stays near its highest level since 20022026-10-02
  • Next ISM manufacturing report, showing if factory input costs keep climbing2026-11-02

Educational content only. Not investment advice.

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