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Payrolls Cool, Yields Don’t

A softer jobs report boosts stocks and lowers hike odds, while bond yields stay stubbornly high.

Author

Elie Zakhour
October 05, 2026

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Payrolls Cool, Yields Don’t

Stocks rallied Friday as a surprisingly weak September jobs report eased fears of another near-term Fed rate hike. The U.S. added just 29,000 jobs, well below the 90,000 expected, while unemployment rose to 4.2% and wage growth cooled. The S&P 500 gained 0.7%, while the Nasdaq-100 climbed 1.0% to a record close, as markets sharply reduced the odds of an October hike.

Lower energy prices added to the relief, with WTI crude settling at $91.11 Friday before slipping further to around $90.12 Monday morning. The G7’s coordinated release of 100 million barrels of diesel and other emergency reserves has added supply, while Middle East crude exports have recovered to around or above pre-war levels despite continued attacks on tankers in the region.

Treasury yields remain a pressure point, however. The 10-year hit 5.34% on Thursday, its highest level since 2002, before retreating later in the session. Yields initially fell again after Friday’s weak jobs report, but the move quickly reversed, with the 10-year climbing back to about 5.28% by late Friday as the broader bond selloff resumed. By Monday morning, yields were still hovering above 5.2%, showing that softer labor data has eased near-term Fed fears without fully calming the bond market.

That tension carried into Monday’s premarket setup. Traders pushed the odds of an October Fed hike below 20% as oil continued to ease, but elevated Treasury yields kept investors cautious. In Europe, French fiscal concerns pushed the euro to a 17-month low and added pressure to French and broader euro-zone bond markets.

Peel Take: Bad news was good news for Wall Street on Friday, at least while the labor market cools without cracking. September’s weak jobs report gives the Fed more reason to wait, while falling oil takes some heat out of inflation. But with the 10-year still above 5%, investors need a soft landing, not a hard stop, for the rally to keep running.

What's Ripe

Hewlett Packard Enterprise Co. (HPE) 7.36% 

  • HPE jumped 7.36%, making it one of the S&P 500’s top performers, as investors continued to react to the company’s stronger networking outlook. HPE raised its fiscal 2027 networking revenue-growth forecast to the high-teens to low-20% range, driven partly by strong AI-related demand.

  • The company also announced a $1.2 billion AI infrastructure order from cloud provider Vultr, reinforcing expectations that the AI infrastructure boom is benefiting more than just chipmakers.

  • Peel Take: AI spending is spreading further down the infrastructure stack. If hyperscalers and cloud providers keep building, HPE’s networking and server businesses could become another picks-and-shovels winner from the AI boom.

ON Semiconductor Corp. (ON) 6.01% 

  • ON Semiconductor rose 6.01% after revising its agreement to acquire Synaptics for $5.7 billion in cash, replacing an earlier deal structure valued at roughly $7 billion in stock.

  • Synaptics jumped about 14% as investors welcomed the $123-per-share cash offer, while the new structure removes the share dilution ON shareholders would have faced under the original stock deal.

  • Peel Take: Cash speaks louder than stock. The revised deal gives Synaptics shareholders more certainty while allowing ON Semiconductor to expand its chip portfolio without issuing millions of new shares.

What's Rotten

Seagate Technology Holdings PLC (STX) 10.21%

  • Seagate tumbled 10.21%, making it one of the S&P 500’s worst performers, after reports that Toshiba plans to double production capacity for data-center hard drives and invest about $380 million to expand facilities in the Philippines.

  • Rival Western Digital also fell about 10% as investors weighed the prospect that additional supply could eventually increase competition in a market where tight capacity has helped support pricing.

  • Peel Take: The AI data-center boom may be growing the storage pie, but Toshiba wants a bigger slice. More capacity could eventually weaken the tight supply backdrop that has helped Seagate and Western Digital maintain strong pricing.

Rivian Automotive Inc. (RIVN) 3.12%

  • Rivian fell 3.12% Friday despite reporting record third-quarter deliveries of 19,248 vehicles, beating Wall Street expectations of roughly 18,000.

  • Investors focused instead on the company leaving its full-year delivery forecast unchanged at 65,000 to 70,000 vehicles, disappointing those hoping the strong quarter would lead to another guidance increase.

  • Peel Take: Rivian delivered the beat but skipped the raise. With the R2 rollout gaining traction, investors now want proof that stronger demand can translate into a higher full-year outlook and eventually better profitability.

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Previous

A company’s revenue increased by 20% in Year 1 and then decreased by 20% in Year 2. If revenue was $100 million before Year 1, what was revenue at the end of Year 2, and what was the total percentage change from the starting level?

Answer: $96 million, representing a 4% decrease from the starting revenue

Today

A bank has $500 million in loans earning an average interest rate of 6% and $400 million in deposits costing 2%. Ignoring all other assets, liabilities, and expenses, what is the bank’s annual net interest income?

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