Weak NFP Cuts Fed Hike Odds as Yields Stay at 24-Year Highs
thePropTrade Week – Sunday 4th October 2026
5 min read
- October 04, 2026
Hi Traders,
Yields stayed at generational highs and the Dollar surged, until Friday’s weak jobs report cut Fed rate hike bets and sparked a rally in stocks.
Global Yields Stay at Generational Highs
Global yields stayed at generational highs this week. The benchmark US 10-year hit a 24-year high above 5.3%, touching 5.34% on Thursday, while the US 30-year held around 5.6%. UK 30-year gilts reached 1997 highs, and European and Asian bond markets are also at multi-decade highs.
Dollar Surges as Euro, Cable and Yen Slide
The Dollar had another stellar week. The Euro traded down into 1.12, Cable broke under 1.32 and the Yen breached 158 again. The Loonie, Swissy and Kiwi all hit 2026 lows, and even the Aussie hit a 13-week low despite a 25 bp rate hike.
Weak NFP Cuts October Fed Hike Odds
Friday’s Non-Farm Payrolls were the week’s main event, and they disappointed. The US added just 29,000 jobs in September against forecasts of roughly 85,000-90,000. July and August were revised down by a combined 60,000, with July now a 10,000 loss. Unemployment rose to 4.2% from 4.1%, largely because more people entered the labour force. Private payrolls rose 46,000 and hourly earnings rose just 0.1% on the month (3.0% annualised).
Earlier in the week, Core PCE had come in cooler at 3.0% annualised, up 0.2% on the month. Together the two reports cut the odds of an October Fed rate hike from around 64% a week ago to below 20%. Yields dipped on the NFP release but retraced as the session went on.
Stocks Rally Friday as Nasdaq Touches Record High
Stock markets were lower for much of the week, then rallied on Friday as rate-hike bets faded. The Nasdaq gained 1.2% on the day to close at 27,191, touching an intraday record, and finished the week up 0.5%. The S&P 500 closed at 7,723 (-0.3% on the week) and the Dow at 51,177 (-1.3%). Nvidia hit a new all-time intraday high and its market value passed $5.7 trillion. Tesla jumped 5.7% after third-quarter deliveries of 486,532 beat forecasts.
Gold Slides, Brent Back Above $105, Bitcoin Holds $85,000
Gold tanked into the $4,100s, its lowest since early August, and closed around $4,143 for a second weekly loss of more than 2%. Brent charged back over $105 on increased war uncertainty before oil eased as Saudi pipeline flows recovered, and WTI ended the week near $91.50. Bitcoin held around $85,000, touching $87,000 on Friday before closing near $84,400.
The Week Ahead: ISM Services, Fed Minutes and PMIs
Next week, October gets into full swing with ISM services on Monday, services PMIs, the Fed Minutes and more consumer sentiment readings. Chinese markets are closed for Golden Week and return on 8th October.
Trade Safely!
Written by Stuart Cowell, Head of Education