- The U.S. manufacturing PMI hit 56.0 in October, the highest level in 53 months.
- Services PMI fell to 57.9 from 58.8, while the composite PMI eased to 57.6 from 58.4.
- Rising U.S. selling prices raised inflation concerns, potentially complicating Fed rate-cut expectations.
U.S. business activity data showed continued economic growth in October, but rising selling prices raised concerns about inflation. The figures sent mixed signals as traders assessed whether strong demand could delay Federal Reserve rate cuts.
Manufacturing Strength Contrasts With Slower Services Growth
S&P Global’s preliminary October Manufacturing Purchasing Managers’ Index (PMI) rose to 56.0 from 55.9 in September, reaching its highest level in 53 months. The reading also exceeded the 55.5 forecast, indicating stronger factory-sector activity than economists had expected.
Meanwhile, the services PMI declined to 57.9 from 58.8, while the composite PMI, which combines manufacturing and services, eased to 57.6 from 58.4. Both remained well above 50, the threshold separating expansion from contraction. The figures therefore showed slower overall momentum rather than a shrinking private sector.
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Crypto Sentiment Turns to Inflation and Fed Policy
The data presents a mixed signal for crypto markets: stronger economic activity can support growth, but persistent inflation may limit the Federal Reserve’s ability to cut interest rates. If rates remain higher for longer, investors may become less willing to hold volatile assets such as Bitcoin and altcoins.
The composite PMI was close to a five-year high, with the selling-price index at 59.8, the highest level since August 2022. The global supply chain continues to face further disruptions, and input costs have increased, adding to the inflationary pressures.
Market Reaction Keeps Rate Expectations in Focus
The U.S. dollar received modest support after the PMI release. The Dollar Index rose 0.09% to around 101.70 following the data, reflecting the market’s assessment of continued economic strength.
For crypto traders, the release added another variable to an already uncertain market environment. Bitcoin had fallen below $82,000 and Ether below $2,400, as technology stocks weakened and geopolitical tensions weighed on risk appetite.
The next focus was the Federal Reserve’s October 27–28 meeting, alongside incoming inflation and consumer data. Traders must weigh two competing signals: resilient U.S. activity supports economic growth, while accelerating prices could complicate expectations for monetary easing. That tension is likely to keep macroeconomic releases central to short-term crypto sentiment.
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