July's manufacturing Purchasing Managers' Index (PMI) came out just 1 point lower than expected at 48, while services PMI rose 2.6% from June to 51.4.

S&P Global Market Intelligence chief business economist Chris Williamson joins Catalysts to give insight into the PMI data and what it means for the broader market.

"The big takeaway here is really that you've got sustained growth into August. So the third quarter is looking like it's going to be another reasonable period of GDP [gross domestic product] expansion," Williamson explains. "At the same time, the underlying inflationary pressures are further cooling. So this is all soft landing scenario stuff."

Williamson believes with interest rate cuts increasingly likely in September, the economy can continue to show strength:

"If you get some rate cuts, they're going to support that service sector and stop that spillover. So that's our base scenario really that you're going to have this domestic strength in the US economy. Manufacturing is a small part of the economy, it's only around 10%. If you can keep that bigger chunk of the economy going — the service economy — which is much more receptive to interest rates and much more dependent on domestic demand, and the labor market in particular. You should get this recovery sustaining into the second half of the year quite nicely."

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Nicholas Jacobino