{"id":72139,"date":"2026-09-23T10:08:14","date_gmt":"2026-09-23T14:08:14","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/us-business-activity-surges-to-multi-year-highs-as-middle-east-tensions-escalate\/72139\/"},"modified":"2026-09-23T10:08:14","modified_gmt":"2026-09-23T14:08:14","slug":"us-business-activity-surges-to-multi-year-highs-as-middle-east-tensions-escalate","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/us-business-activity-surges-to-multi-year-highs-as-middle-east-tensions-escalate\/72139\/","title":{"rendered":"US Business Activity Surges to Multi-Year Highs as Middle East Tensions Escalate"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>US business activity hit a 62-month peak<\/strong> in September, with the <strong>Composite PMI climbing to 58.4<\/strong>, far exceeding the 54.9 estimate and the previous 56.0 reading.<\/li>\n<li><strong>Iran\u2019s security chief Mohsen Rezaei<\/strong> declared the <strong>Strait of Hormuz will remain closed<\/strong> until the U.S. meets seven specific conditions, including an end to the naval blockade and the release of frozen assets.<\/li>\n<li><strong>US Treasuries extended their slide<\/strong> following the strong PMI data, with the <strong>10-year yield testing the 5% threshold<\/strong> as markets price in a more hawkish Federal Reserve.<\/li>\n<li><strong>Italian Finance Minister Giancarlo Giorgetti<\/strong> reported a growing consensus within the EU for a <strong>windfall tax on the energy sector<\/strong> to combat soaring costs linked to Middle East instability.<\/li>\n<li><strong>Iranian Foreign Minister Abbas Araghchi<\/strong> issued a stern warning to European officials against supporting what he termed &quot;war crimes&quot; by the U.S. and Israel, threatening that countries hosting U.S. bases could be considered &quot;complicit in aggression.&quot;<\/li>\n<\/ul>\n<h2>US Economic Growth Accelerates Amid Inflationary Pressures<\/h2>\n<p>The U.S. economy displayed unexpected resilience in September as <strong>S&amp;P Global (<a href=\"\/stock\/SPGI\">SPGI<\/a>)<\/strong> reported a surge in business activity across both the manufacturing and services sectors. The <strong>Services PMI reached a 5-year high of 58.7<\/strong>, significantly outperforming the 55.8 consensus, while the <strong>Manufacturing PMI jumped to 57.0<\/strong> from 53.9 in August. This robust data suggests the U.S. economy is currently growing at an annualized rate of approximately 5%, according to <em>S&amp;P Global Market Intelligence<\/em>.<\/p>\n<p>However, the &quot;boom&quot; in activity has brought a resurgence of capacity pressures. <strong>Employment rose at the fastest rate since June 2022<\/strong>, yet backlogs of work accumulated at the sharpest pace in over two years. <em>Economists warn that these supply chain bottlenecks and intensifying price pressures\u2014driven by higher fuel and wage costs\u2014may complicate the Federal Reserve&#39;s path toward interest rate stability.<\/em><\/p>\n<h2>Geopolitical Gridlock in the Strait of Hormuz<\/h2>\n<p>Tensions in the Middle East reached a critical juncture on Wednesday as Iranian officials solidified their hardline stance. <strong>Mohsen Rezaei<\/strong>, Secretary of the Supreme National Security Council, stated that <strong>no negotiations or reopening of the Strait of Hormuz<\/strong> would occur until Washington fulfills Tehran&#39;s demands. These include an end to the regional conflict on all fronts and the unfreezing of Iranian funds.<\/p>\n<p>The strategic waterway, which previously handled approximately <strong>20% of global oil and LNG flows<\/strong>, has been largely idle since hostilities intensified. Iranian Foreign Minister <strong>Abbas Araghchi<\/strong> further escalated the rhetoric at the UN General Assembly, warning European nations that their &quot;silence&quot; on U.S.-Israeli actions amounts to complicity. He specifically targeted countries hosting U.S. military bases, suggesting they could face &quot;international responsibility&quot; for facilitating military operations.<\/p>\n<h2>Market Reaction and Energy Policy Shift<\/h2>\n<p>Financial markets reacted sharply to the dual pressure of strong economic data and geopolitical risk. <strong>US Treasuries<\/strong> continued to sell off, pushing yields higher as the prospect of &quot;higher-for-longer&quot; interest rates gained traction. Major stock indices opened lower, with the <strong><a href=\"https:\/\/stockmarketwatch.com\/indices\/dowjones\/today\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Dow Jones Today\">Dow Jones<\/a> Industrial Average<\/strong> falling <strong>146.10 points (0.28%)<\/strong> and the <strong><a href=\"https:\/\/stockmarketwatch.com\/indices\/sp500\/today\" data-internallinksmanager029f6b8e52c=\"3\" title=\"snp500 today\">S&amp;P 500<\/a><\/strong> slipping <strong>0.09%<\/strong> in early trading.<\/p>\n<p>In Europe, the energy crisis triggered by the Hormuz blockade is driving a significant policy shift. <strong>Italy\u2019s Finance Minister Giancarlo Giorgetti<\/strong> confirmed that EU members are moving toward a unified <strong>windfall tax on energy companies<\/strong> that have profited from the spike in <a href=\"https:\/\/stockmarketwatch.com\/energy\/crude-oil\" data-internallinksmanager029f6b8e52c=\"12\" title=\"Crude oil\">oil prices<\/a>, which have climbed <strong>50% since the conflict began<\/strong>. Italy, along with Germany and Spain, is pushing for these taxes to fund support measures for vulnerable households facing a dramatic rise in the cost of living.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways US business activity hit a 62-month peak in September, with the Composite PMI climbing to 58.4, far exceeding 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