US Stocks Hit Records on Weak Jobs Data, Then Retreat as Yields and Oil Surge

US equity markets opened the week of October 5 on a new footing after September payrolls rose by only 29,000, far below forecasts, and prior months were revised lower. The probability of a Federal Reserve rate increase in October dropped from over 60 percent to under 20 percent within days.

Wall Street closed Friday, October 2, with the S&P 500 up 0.73 percent at 7,722.72 and the Nasdaq Composite gaining 1.19 percent to 27,190.86. The rally extended into Tuesday, October 6, when the S&P 500 reached a record 7,818 and the Nasdaq hit 27,599, marking its second straight record close.

“Investors are looking for some relief from oil, which could lead to a decline in yields and, by extension, support the equity market.”

Nvidia led mega-cap gains, rising 2.1 percent to a market value of $5.76 trillion, while Microsoft, Meta Platforms, and Tesla each advanced around 2 percent. Falling oil prices and stabilizing bond yields initially supported the advance.

The advance reversed on Wednesday, October 7, as the 30-year Treasury yield touched a 24-year high and Brent crude closed above $100 a barrel on supply concerns linked to the Iran conflict. The S&P 500 and Dow Jones snapped four-day winning streaks, and the Nasdaq fell for the first time in five sessions.

Investors now await the September ISM Services index, the US trade balance, and the Fed's September meeting minutes for clues on inflation and employment trends. In Europe, France's budget and debt challenges remain a focal point for markets.