U.S. inflation risks build as S&P Global flash composite PMI jumps to 58.4, a five-year high
AI Market Summary
S&P Global's flash U.S. Composite PMI rose to 58.4, with stronger new orders and rising backlogs, signaling resilient demand and tighter capacity. Input costs and delivery delays increased, reinforcing inflation risk and firms' pricing power. Markets reacted with a firmer dollar, higher Treasury yields (10Y back above 5%), and weaker spot gold, aligning with a Fed still signaling additional hikes after last week's 25 bp move.
Impact level
● High
Affected assets
NCCOGOLD2USD/USDT-0.94%
AI Insight · NCCOGOLD2USD/USDTAI Insight
▼ Bearish
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S&P Global's flash reading for September showed the U.S. Composite PMI Output Index rising to 58.4 from 56.0 in August, the strongest level since July 2021 and a sign of solid expansion across both manufacturing and services.
The new orders index climbed to 58.2 from 55.2, the highest since March 2022. With demand firm, order backlogs rose to their highest level since May 2022. S&P Global said the growing backlog points to further gains in output and capacity in the months ahead, while also strengthening firms' pricing power and potentially adding to inflation pressures.
Price gauges accelerated sharply. The input purchasing prices index increased to 66.4 from 59.9, the highest since October 2022. S&P Global attributed the cost pressures to supply-chain delays and insufficient operating capacity, noting supplier delivery times lengthened to the greatest extent since July 2022.
After the report, spot gold slipped below $4,300, the U.S. dollar index moved above 101, and U.S. Treasury yields extended their rise, with the 10-year yield back above 5%.
The Federal Reserve raised its benchmark rate by 25 basis points last week to a 3.75% to 4.00% range and signaled additional hikes could follow in the coming months.
