The US services sector unexpectedly contracted in May, signaling a worrying trend for the economy as it recorded a PMI of 49.9, marking the first contraction in nearly a year. This decline, attributed to ongoing trade fights and uncertainty stemming from tariffs, has raised concerns about future inflation and economic stability. Meanwhile, manufacturing activity also continued to struggle, showing a sustained contraction for the third consecutive month as tariffs significantly impacted supply chains and raised operational challenges for American factories. Analysts are now calling for potential interest rate cuts by the Federal Reserve to mitigate the economic strain, amidst heightened tensions and a weakening production landscape.