Soft September jobs report lifts stocks as Fed hike bets fade
U.S. payrolls rose just 29,000 and unemployment ticked to 4.2%, cutting October rate-hike odds and sending major indexes higher Friday.
What moved: Major U.S. stock indexes rose Friday after a softer-than-forecast September employment report cooled expectations for a Federal Reserve rate increase later this month, Reuters reported via MarketScreener. The Wall Street Journal said the S&P 500 gained 0.73% to 7,722.72, the Dow Jones Industrial Average rose 0.49% to 51,176.96, and the Nasdaq Composite advanced 1.19% to 27,190.86. A softer dollar and easier oil prices also helped equity sentiment, Reuters said.
Jobs print: Nonfarm payrolls increased by 29,000 last month after a downwardly revised 133,000 rise in August, the Labor Department reported, according to Reuters. Economists polled by Reuters had expected about 90,000 new jobs. Investing.com’s Reuters wrap said August had previously been reported as a 162,000 surge before the revision. The unemployment rate rose to 4.2% from 4.1% in August, Investing.com reported.
Fed odds: Traders saw roughly a 21% chance of a 25-basis-point October hike after the report, down from about 26% beforehand, according to LSEG figures cited by Reuters. Investing.com noted rate-hike expectations for this month’s meeting fell as low as about 12% intraday. December hike odds also eased. Two top Fed policymakers had already said this week they wanted more data before deciding, Reuters reported; the Fed raised rates in September for the first time since 2023.
Bonds and oil: Treasury yields initially fell on the jobs data but finished higher on the day as some investors still priced another hike within six to nine months, Reuters said. The 10-year yield was last up about 2 basis points near 5.26%. U.S. crude fell more than 2% to about $90.83 a barrel and Brent eased toward $101, helping the equity tone after reports of European talks on diesel and crude stock releases, Reuters said.
What this means: Friday’s soft payrolls were the payoff markets had been waiting for after days of bond-yield stress — stocks got a relief bounce, but the Fed’s next move still hinges on whether labor cooling sticks as war-driven energy costs linger.