The Philadelphia Fed Manufacturing Index unexpectedly turned negative, coming in at -0.4. Analysts had forecast 17.6.
This sharp decline from last month's 26.7 signals contraction in the sector. The index is based on a survey of about 250 manufacturers.
A reading below zero indicates deteriorating conditions. The shift may impact broader economic outlook.
Market participants see it as a leading indicator; negative data is bearish for the U.S. dollar. The sector will be closely monitored.
