Markit Economics released its preliminary services purchasing managers' index (PMI) for the U.S. on Tuesday. The U.S. preliminary services purchasing managers' index (PMI) dropped to 53.7 in January from 54.3 in December. Analysts had expected the index to fell to 54.0.

A reading above 50 indicates expansion in economic activity.

The drop was driven by a weaker output growth.

"The survey data paint an inauspicious start to the year for the US economy. A struggling manufacturing economy is being accompanied by a services sector where growth showed further signs of losing momentum in January even before the bad weather hit," Markit Chief Economist Chris Williamson said.