Dow surges 559 points as US business activity hits four-year high

The Dow Jones Industrial Average climbed 559 points on Thursday after a surprisingly strong reading on US business activity gave investors exactly the kind of data they’d been hoping for. The S&P Global flash US composite Purchasing Managers’ Index hit 56.0 in August, up from 54.5 in July, marking its highest level in 52 months. That’s the fastest pace of private-sector expansion since April 2022, back when rate hikes were just getting started and “transitory” was still making the rounds as the Fed’s favorite adjective. Services carried the load The services sector was the star of the report, posting a PMI of 56.8, its strongest reading in 20 months. For context, anything above 50 signals expansion, so 56.8 represents a comfortably accelerating pace of growth in the sector that accounts for the bulk of US economic output. Manufacturing told a slightly different story. Its PMI slipped to 53.2, a marginal decline from the prior month. Still, it remained firmly in expansion territory. Beyond the headline numbers, the underlying components of the report painted an encouraging picture. Employment growth accelerated meaningfully, and business expectations surged to a nine-month high....