US Business Activity Slows to 11-Month Low in March

U.S. business activity expanded at its slowest pace in 11 months during March, according to a preliminary survey released Tuesday, as the ongoing war in the Middle East drove up energy costs and fueled concerns over accelerating inflation. The SP Global flash Composite Purchasing Managers' Index fell to 51.4 from 51.9 in February, marking the lowest reading since April of the previous year and the second consecutive monthly decline. Readings above 50 signal overall growth in the private sector.

The slowdown primarily stemmed from weakening services activity, where the PMI slipped to 51.1 from 51.7 the prior month, missing economists' expectations of a milder drop to 51.5. In contrast, manufacturing showed resilience, with the sector's PMI rising to 52.4 from 51.6, surpassing forecasts for a decline to 51.3. This uptick partly reflected easing pressures from earlier tariffs on order books.

Businesses reported higher input costs amid the conflict between the United States, Israel, and Iran, which sent oil prices surging more than 30 percent and pushed average national gasoline prices up nearly $1 per gallon. Although oil prices dipped to a one-week low on Monday following...