The Dallas Fed’s general business activity index for Texas manufacturing rose to 11.6 in August 2026 from 1.3 in July, exceeding the 1.6 consensus and reaching its highest level since January 2025. The positive reading indicates expansion and reflected stronger production, new orders, shipments and capacity utilization, while the employment index declined. Production rose to 16.1 from 10.1, new orders to 22 from 6.4, shipments to 14.1 from 8.8 and capacity utilization to 12.8 from 5.9. The company outlook index improved to 19.2 from 13.4, while firms raised expectations for future production to 40.9 from 34.6 and general business activity to 37.2 from 26.5. Inventories continued building, delivery times lengthened and input costs remained elevated, although prices received eased slightly. The Federal Reserve Bank of Dallas said uncertainty about the broader economic outlook remained. The strong regional data pushed the U.S. 10-year Treasury yield from 4.72% to 4.764%, while dollar-yen rose to 159.73 yen from 159.60 yen. The euro traded near $1.1614 and GBP/USD slipped to $1.3550 after reaching $1.3565. The survey’s expansionary reading contrasts with lingering weakness in some nationwide manufacturing measures, leaving investors focused on whether the improvement spreads and how it affects Federal Reserve policy expectations.