Friday, October 2

September payrolls rose just 29,000, far short of the 84,000 estimate, while unemployment ticked up to 4.2%. Downward revisions totaling about 60,000 jobs across the prior two reports made the weakness harder to dismiss as a one-month miss. Markets rapidly reduced expectations for Fed tightening: the implied probability of an October hike fell to 16% in one account, from 64% a week earlier.

Equities rallied, with the Nasdaq 100 closing at a record and the S&P 500 and Dow also higher. The initial Treasury rally did not hold: the 10-year yield reversed from about 5.16% to finish 4–5 basis points higher, showing that weaker growth data eased near-term Fed risk without settling concerns about inflation, fiscal borrowing, or term premia. European government yields fell, contrasting with the U.S. move. The split reaction leaves the Fed-hike repricing supportive for equities, but elevated long-term yields still constrain the broader easing impulse.

The G7’s signal that it would release emergency fuel supplies pulled WTI lower, at one point sending the contract down roughly 4% to $89.11. The plan was described as involving about 100 million barrels of crude and diesel, putting a potential source of near-term supply directly against the geopolitical premium in oil. WTI later stood near $91.48, down about 1.5%, while Brent was reported higher at $102.80.

That divergence matters: the reserve-release signal moderated U.S. crude prices but did not produce a uniform retreat across benchmarks, underscoring that regional supply concerns and contract timing still shape the price response. The move also partially reversed oil’s earlier rise, while leaving the market sensitive to whether the proposed release translates into actual barrels and how persistent the supply risks prove to be.