Manufacturing index ISM 52.1 vs. 53 is.

In the United States, manufacturing industry has fallen to its lowest level in two and a half years, due to escalating global trade tensions.

According to Refinitiv's estimates, the ISM manufacturing index, closely watched, dropped to 52.1 in May, compared to 53 expected. It was the lowest reading since October 2016.

Construction spending also disappointed, with a result unchanged from the forecast of a 0.4% growth in April.

For the manufacturing industry, the main detractors were supplier deliveries, which dropped by 2.6 percentage points to 52%, and inventories, which decreased by 2 percentage points to 50.9%. .

The ISM index represents companies' readings on their expansion plans. Any reading above 50 is therefore considered expansive.

Respondents' comments "reflect the continued growth of the company's business, but at low levels consistent with the expansion of early 2016," said the chairman of the company. ISM, Timothy R. Fiore, in a statement.

The report is part of a growing tariff battle between the United States and China, with negotiations stalled, with the Trump administration seeking concessions, opening more markets for US products, and providing for stricter provisions against intellectual property theft and the forced transfer of technology.

In a statement Friday, President Donald Trump threatened to expand the battle in Mexico, which he threatened with tariffs if the country does not stop the flow of illegal immigrants to the states -United.

"In the end, there is a commercial storm center and concerns about trade, it's manufacturing and the impact continues to be increasingly evident," said Peter Boockvar, Chief Investment Officer at Bleakley Advisory Group, in a note.

Despite the tensions and downward pressure that they have exerted on Wall Street and the stock market, the news is not all bad in the ISM report.

The index of production rose 1 point to 51.3 and employment, 53 points to 53.7. The price index also rose sharply from 50 in April to 53.2 in May.

"Respondents have expressed concern over the escalating trade stalemate between the United States and China, but the overall sentiment has remained positive overall," Fiore added.