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Gauge of US manufacturing hits lowest since September 2009, raising concerns about the economy

A gauge of U.S. manufacturing from IHS Markit fell to the lowest since September 2009.

Source: IHS Markit

The IHS Markit Manufacturing Purchasing Managers' Index fell to 50.4 in July, down from 50.6 in June, driven by a weaker demand. The firm also noted managers' signaled slower hiring. 

A gauge of employment within the report fell to the lowest since mid-2013 in July.

Stocks rose and bond yields fell following the release from IHS Markit as traders bet more weak readings such as this one could cause the Federal Reserve to follow through with more rate cuts following its one on Wednesday.

"US manufacturing has entered into its sharpest downturn since 2009, suggesting the goods-producing sector is on course to act as a significant drag on the economy in the third quarter," added IHS Markit economist Chris Williamson in a release.

Readings above 50 signal expansion.