Dow jumps 324 points as weak jobs data cools October Fed hike bets

• The Dow Jones rose 324 points, S&P 500 gained 0.79%, and Nasdaq advanced 1.21% following the disappointing jobs report
• Probability of an October Fed rate hike dropped to 16% from 26%, with markets now pricing in an 86% chance rates remain unchanged
• Semiconductor stocks led gains as Treasury yields fell, with the 10-year yield declining to 5.20% and Bitcoin rising 4% on improved risk sentiment

Market Summary: Weak Jobs Data Drives Rally, Fed Hike Expectations Fade

Key Market Movements

US equities rallied Friday following disappointing employment data. The Dow Jones gained 324 points, S&P 500 rose 0.79%, and Nasdaq advanced 1.21%. Despite daily gains, the S&P 500 remained down 1% for the week, while the Dow faced a 1.7% weekly decline.

Employment Data Details

September payrolls added just 29,000 jobs versus expectations of 90,000, down from August's downwardly revised 133,000. Unemployment ticked up to 4.2% from 4.1%, signaling labor market weakness.

Federal Reserve Implications

The weak jobs report significantly altered Fed rate hike expectations. Probability of an October 25-basis-point hike dropped from 26% to 16% post-data. Markets now price in an 86% chance the Fed holds rates steady this month, up from 76% the prior day. Treasury yields declined accordingly, with the 10-year falling to 5.20% and the two-year continuing its second consecutive session of declines.

Sector Performance

Technology and semiconductor stocks led gains, with Nvidia and AMD advancing as lower yields improved risk sentiment. Bitcoin rose 4%, boosting crypto-related stocks like Coinbase and Strategy (both up ~5%).

Oil prices provided additional support, with Brent crude falling below $100/barrel on reports of potential European stockpile releases, potentially easing inflation pressures.

Notable Stock Movements

Nike shares moved sharply following corporate developments, while Fair Isaac dropped 5.8% after reports the Federal Housing Finance Agency plans to ease mortgage credit data requirements for Fannie Mae and Freddie Mac.

The combination of weaker economic data and declining yields created a favorable environment for risk assets while reinforcing expectations for Fed policy restraint.