ISM Services Miss Sparks Fed Cut Speculation, Sends Bitcoin Sliding Under $113K

Bitcoin Slides Below $113K as ISM Services Data Sparks Fresh Recession Fears

Bitcoin retreated under $113,000 on Tuesday following disappointing U.S. economic data, as signs of slowing activity in the services sector added to last week’s labor market concerns. The ISM Services PMI for July came in at 50.1, well below the 51.5 forecast and just barely in expansion territory.

The data marks the third straight month of sluggish momentum, following a 49.9 print in May and 50.8 in June, highlighting a consistent trend of economic softening. The headline number was made worse by a surge in the Prices Paid subindex, which climbed to 69.9—the highest in this cycle—raising the specter of stagflation.

One survey respondent flagged tariffs as a major cost driver, saying:

“Tariffs are causing additional costs as we continue to purchase equipment and supplies … the cost is significant enough that we are postponing other projects.”

Crypto and Equity Markets React

The risk-off tone hit both traditional and digital markets. Bitcoin (BTC) dropped nearly 2% to $112,800, reversing from earlier gains. U.S. equities followed suit, with the Nasdaq closing down 0.5%, despite a stronger open.

Calls for Fed Action Grow Louder

Friday’s sharp downward revisions to U.S. job growth had already stirred recession concerns. Now, with the services sector flashing weakness and price pressures persisting, the market is reassessing the Fed’s next move.

Economist Mark Zandi noted:

“The economy is on the precipice of recession. Spending has stalled, manufacturing is in contraction, and employment is next. The Fed’s hands are tied with inflation rising, but it may not be able to wait much longer.”

Fixed-income veterans Lacy Hunt and Van Hoisington echoed the urgency, dismissing tariff-driven inflation as temporary:

“The Fed needs to pivot quickly. Waiting too long risks deepening the global economic contraction.”

As macro headwinds gather and risk assets wobble, traders are now watching closely for signs of a policy shift — or further economic deterioration that forces the Fed’s hand.