Economic Indicators - The ISM services index came in at 50, indicating continued expansion but below the expected 51.8 and down from 52 last month [2][3] - Prices paid in the ISM services report rose to 69.4, slightly up from 69.2, indicating inflationary pressures [2][3] - The employment gauge for ISM services was reported at 47.2, showing contraction, which aligns with recent labor market trends [8][9] Market Reactions - Following the ISM services report, the S&P 500 experienced a sell-off, dropping from 6740 to around 6725 [4][5] - The dollar initially moved lower, while yields increased, reflecting market concerns over inflation and economic growth [4][6] Global Economic Context - Eurozone PMIs showed mixed results, with the composite PMI at 51.2, indicating expansion, but France's PMI remained in contraction at 48.1 [13][15] - The UK services PMI fell sharply to 50.8 from 54.2, indicating a deceleration in economic activity [16][17] Investment Themes - Defensive sectors outside of technology and semiconductors are leading the market, driven by portfolio rebalancing and supply constraints in key industries [21][24] - Continued investment in artificial intelligence and data center buildouts is pushing market cap higher, contributing to S&P 500 strength [23][24]