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U.S. stocks rose Friday after a weaker-than-expected September jobs report reduced market-implied odds of a Federal Reserve rate hike at its October meeting. The Nasdaq Composite gained 319 points, or 1.2%, while Treasury yields reversed an initial drop and finished higher.
U.S. stocks climbed Friday after a weaker-than-expected September jobs report eased market expectations for an October Federal Reserve rate hike. The Nasdaq Composite added 319 points, or 1.2%, to 27,190, while the Dow and S&P 500 also advanced; Treasury yields, however, recovered from an early decline and ended higher.
The Bureau of Labor Statistics reported that the United States added 29,000 jobs in September, below the 93,000 forecast cited in the report. The unemployment rate rose to 4.2% from 4.1%. The employment figures initially pulled down Treasury yields, with the two-year yield moving from 4.787% Thursday to 4.693% after the release. It later reversed course, closing up 5 basis points at 4.837%.
Other benchmark yields also finished higher. The 10-year Treasury yield gained 4.5 basis points to 5.279%, and the 30-year yield rose 2.5 basis points to 5.628%. Those moves came as investors weighed the jobs data against the possibility that inflation and other developments could still influence the Fed’s decision.
At the close, the S&P 500 rose 0.7% to 7,722, and the Dow Jones Industrial Average gained 0.5% to 51,176. Oil also fell: the front-month West Texas Intermediate contract was down 1.5% at $91.45 a barrel. The report said the G7 and International Energy Agency would coordinate the release of up to 100 million barrels of emergency crude oil and diesel over four months to mitigate supply-chain disruptions.
Jobs Data Shifts Rate Expectations
The session showed how employment data can influence expectations for borrowing costs, which matter to companies and investors across the market. After the report, federal funds futures implied a 22.7% probability of a 25-basis-point hike at the October Fed meeting, down from 64.2% a week earlier, according to CME FedWatch figures cited in the source. That is a market-implied probability, not a decision or promise from the Federal Reserve.
The rally did not extend uninterrupted through the day. The main indexes retreated from their intraday highs, and longer-term Treasury yields ended above their prior closes. The mixed market response underscores that one softer jobs report did not settle the outlook for rates or inflation. For readers tracking investments, Friday’s gains describe one trading session and do not establish how markets or Fed policy will move next.
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The October Fed Decision Ahead
The Fed’s next decision was scheduled for later in October, and the employment report was only one input. Fifth Third Commercial Bank Chief Economist Bill Adams said downward revisions to July and August had removed the acceleration in job growth that had appeared in the August report. The September total therefore came amid a revised picture of recent hiring, not just a single monthly reading.
Adams also cautioned that the latest employment figures might not move the Fed’s attention away from inflation. He said the coming September CPI and PPI reports, geopolitical developments and fuel prices could shape the next decision. The source also described notable company-specific moves: Nvidia reached a record high, Hewlett Packard Enterprise rose 7.4% on expectations for AI-related networking demand, and Nike fell after giving a weaker outlook than analysts expected. Those moves were separate stock developments within the broader market session.
“Payrolls growth disappointed in September.”
— Bill Adams, chief economist at Fifth Third Commercial Bank
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Inflation And Yields Still In Play
Friday’s employment data did not determine what the Federal Reserve will do at its October meeting. The source reported the futures market’s rate-hike probability, but it did not establish the Fed’s decision. September inflation readings were still upcoming, and the source identified geopolitical developments and prices at the pump as additional factors that could affect the outlook.
It is also unclear from the reported figures whether the rise in Treasury yields late in the session will persist, or whether the decline in oil prices will continue. The cited supply release was described as a coordinated plan of up to 100 million barrels over four months; the source did not provide a breakdown of the timing or amounts of individual releases.
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Upcoming Data May Shape Fed Call
Investors will look to the September Consumer Price Index and Producer Price Index reports for further evidence on inflation before the Fed’s late-October decision. The jobs figures, inflation data and other developments will inform expectations, but the source does not report a final policy outcome.
Market watchers will also track Treasury yields, oil prices and any updates on the planned emergency fuel releases. The next sessions will show whether Friday’s gains and the lower futures-implied hike odds hold as more information arrives.
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Key Questions
How much did the Nasdaq gain?
The Nasdaq Composite rose 319 points, or 1.2%, to 27,190 at Friday’s close, according to the report.
What did the September jobs report show?
The Bureau of Labor Statistics reported 29,000 jobs added in September, compared with a 93,000 forecast cited in the source. The unemployment rate increased to 4.2% from 4.1%.
How did the jobs report affect October rate-hike expectations?
CME FedWatch figures cited in the report put the market-implied probability of a 25-basis-point October hike at 22.7%, down from 64.2% a week earlier. This reflects futures-market pricing, not a confirmed Fed decision.
Did Treasury yields fall after the jobs report?
The two-year yield initially fell after the report, from 4.787% on Thursday to 4.693%, but later rose and closed at 4.837%. The 10- and 30-year yields also finished higher.
What could affect the Fed’s next decision?
Fifth Third economist Bill Adams cited the September CPI and PPI reports, geopolitical developments and prices at the pump as factors that could influence the Fed’s late-October decision.
Source: rss
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