Soft September jobs report sparks equity rally as October Fed-hike odds collapse to mid-teens and 2-year yields plunge
What happened
Friday morning's trading brought a broad relief rally after the September employment report printed far softer than expected: 29,000 jobs added versus ~84,000 consensus, unemployment ticking up to 4.2%, and average hourly earnings rising just 0.1%, which dragged 12-month wage growth down to 3.0% — the lowest since May 2021. The Dow gained ~350 points (+0.7%), the S&P 500 rose 0.9%, and the Nasdaq Composite added 1.2%, with S&P 500 futures up 0.8% right after the 8:30 a.m. ET release. Bond yields slid sharply: the 2-year Treasury fell to ~4.72%, putting it on track for its biggest two-day decline since August 2025 (-16.2 bps over two sessions), while the 10-year dropped to ~5.16-5.18% from Thursday's 24-year intraday high near 5.35%. CME FedWatch now shows just ~14-18% odds of an October 28 rate hike — down from ~24-28% on Thursday and ~64% a week ago — and odds of another 25 bp by year-end fell to 75% from 93% a week ago.
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Start your free 14-day trialWho’s affected
- Broad U.S. equities (Dow +350 / +0.7%, S&P 500 +0.9%, Nasdaq Composite +1.2% Friday morning; Nasdaq 100 futures +1%)
- Rate-sensitive sectors (utilities, real estate) — biggest relief beneficiaries from falling yields
- Megacap tech / semiconductors — Nvidia, Broadcom, AMD, Alphabet, Tesla each up ~1% in premarket trading