Factory Slowdown and AI Surge: ETFs Straddle Traditional Steel and Emerging Silicon

U.S. Manufacturing Contraction: U.S. manufacturing has contracted for six consecutive months, with the ISM manufacturing PMI indicating ongoing weakness due to tariffs and sluggish demand, leading to reduced production and employment.

Shift Towards AI Investment: Despite the contraction, companies are increasingly investing in AI and automation technologies, as reflected in the rise of the ISM new orders sub-index, suggesting a potential shift in the industrial growth cycle towards more technology-driven processes.