The U.S. labor market recorded a significant slowdown in September, with the latest Non-Farm Payrolls (NFP) data reporting an increase of only 29,000 jobs. According to a U.S. Department of Labor report released on Friday, this figure fell far short of the consensus forecast—which predicted an increase of between 84,000 and 89,000 positions—and marked a sharp decline from the 133,000 jobs recorded the previous month.
Alongside the drop in new hiring, the official U.S. unemployment rate rose to 4.2%. This reading exceeded market expectations, which had anticipated the rate remaining stable at 4.1%. This dual weakness—combining low payroll figures with rising unemployment—confirms that the monetary tightening cycle is beginning to weigh on business activity, thereby triggering selling pressure on the U.S. dollar.
Despite the economic data revealing labor market weakness, Wall Street responded to the report with a convincing rally. Dow Jones futures surged 458 points (0.9%), S&P 500 futures rose 0.8%, and the Nasdaq-100 climbed 1.2%. This optimistic sentiment is driven by an immediate drop in Treasury bond yields and a significant shift in expectations regarding Federal Reserve (Fed) policy; the Fed funds futures market now assigns a 72% probability that the central bank will hold off on raising interest rates at its October meeting.
In the commodities market, global crude oil prices saw a sharp decline after surging earlier in the week. Brent futures fell nearly 3% to below the psychological $99-per-barrel mark, while U.S. WTI plunged approximately 4% to $89 per barrel. This drop follows reports that European nations are considering releasing emergency strategic oil reserves, following strong pressure from President Donald Trump for Western allies to take immediate action to alleviate the energy crisis.
The combination of a potential pause in Fed rate hikes, falling oil prices, and resilient corporate earnings provides a solid foundation for global equities to withstand the challenges of the second half of the year.
