#USSeptemberCompositePMISurgesTo58.4 $TLT

US Composite PMI Hits 58.4 – Strongest Since 2021, Inflation Pressure Returns

The latest flash S&P Global US Composite PMI came in at 58.4 for September. That is the highest reading since July 2021 and marks a clear acceleration from the previous month. Both services and manufacturing contributed to the jump, with new orders rising and employment growth reaching levels not seen in several years.

At the same time the input price index climbed to 66.4. That is the strongest cost pressure reading since late 2022. Higher energy, transport and raw-material costs are feeding through, and companies also noted some pickup in wage pressures. The combination of faster activity and rising input costs has quickly shifted market focus toward the next Federal Reserve decision.

Stronger growth and re-accelerating price pressures usually translate into higher Treasury yields. When yields rise, longer-duration bonds fall in price. That is exactly the channel that matters for TLT, the long-dated Treasury ETF that is available as a perpetual contract. Recent price action in TLT has already reflected the shift: the ETF has been under pressure as the 10-year yield moved higher following the PMI release.

Current situation for TLT
TLT is trading near the $79.30 area after sliding over the past few sessions. The move lower tracks the rise in yields that followed the stronger-than-expected activity and inflation data.
Possible scenarios

Bullish for yields / bearish for TLT: If subsequent data (jobs, CPI, or the final PMI) continue to show solid demand and sticky costs, rate-hike odds for the next FOMC meeting can firm further. In that case longer yields have room to grind higher and TLT could test lower support zones.

Bearish for yields / constructive for TLT: A clear cooling in the next round of inflation or activity numbers would ease the pressure. Markets could then start pricing a slower path of tightening, which would support a rebound in longer-duration bonds.

What to watch
The final September PMI figures and any revision to the input-price component

Upcoming labour-market and CPI releases that will shape the October FOMC pricing

The reaction of the 10-year and 30-year yields in the days after each data print

Open interest and funding on the TLT perpetual – sustained short interest often signals that the market is positioning for further yield increases

Risks

PMI is a soft survey and can diverge from hard data. A single strong month does not lock in a multi-meeting hiking cycle. Geopolitical or liquidity events can also reverse yield moves quickly, so position sizing on the TLT perpetual needs to stay disciplined.
My overall view is that the September PMI has tilted the short-term balance toward higher yields and continued pressure on long-duration bonds. Until the inflation side of the data softens, the path of least resistance for TLT remains lower. That said, the market is highly sensitive to the next few prints, so any downside in TLT should be treated as data-dependent rather than a one-way trend.

How are you positioning around the next Fed meeting after this PMI surprise?

Not financial advice. Always do your own research before making any trading or investment decision.