The activity in the service sector in the United States rose in December, the Institute for Supply Management (ISM) said in its report on Tuesday. The Services Purchasing Managers' Index (PMI) increased from 52.1% in the previous month to 54.1%, matching analysts' expectations.

According to the report, the Business Activity Index advanced by 4.5 percentage points from November and reached 58.2%. The New Orders Index gained from 53.7% in the prior month to 54.2% in December. The Employment Index slipped by 0.1 percentage points to 51.4%. On the other hand, the Inventory Sentiment rose by 3.5 percentage points month-on-month to reach 49.4%.

"Many industries noted that end-of-year and seasonal factors were helping drive business activity or impact inventory management. Some of the increased business activity seems to have been driven by preparation for demand in the new year, or risk management for impacts from ports strikes and potential tariffs. There was general optimism expressed across many industries, but tariff concerns elicited the most panelist comments," ISM Services Business Survey Committee Chair Steve Miller said.