US September Composite PMI Hits 58.4, Five-Year High; 10-Year Treasury Yield Tops 5% on Rate-Hike Bets

US business activity unexpectedly accelerated in September to its strongest level in over five years, intensifying inflation pressures and boosting market expectations for another Federal Reserve rate hike next month. The 10-year Treasury yield rose above 5% following the data. S&P Global's preliminary US Composite PMI rose to 58.4 in September from 56.0 in August, the highest since July 2021 and well above the 50 expansion threshold. The services PMI climbed to 58.7 from 56.5, while manufacturing jumped to 57.0 from 53.9. S&P Global said the data points to annualized economic growth of about 5%, with third-quarter growth potentially reaching 4%. Input price index surged to 66.4 from 59.9, the highest since October 2022, driven by fuel, transport and raw material costs. Supplier delivery delays were the most widespread since July 2022. The Fed raised its benchmark rate to 3.75%-4.00% last week and signaled further tightening may be needed.