Long-end yields hit a 2007 high even as weak jobs data cut October hike odds to 20%

A 29,000 September payrolls print and cooler core PCE pushed October hike odds from about 70% to roughly 20%, yet the 10-year Treasury still rose 11bp to 5.28% as AI earnings from Micron, Nvidia and Accenture carried the market.

Deepakshi

Kristal Research & Marketing team

2 Oct2 min

Key takeaways — AI summary

US bonds defied good news: despite softer core PCE (0.2% m/m, 3.0% y/y) and September payrolls of just 29,000 versus 84,000 expected, the 10-year yield rose 11bp to 5.28% and the 30-year pushed above 5.6%, its highest since 2002, pressured by oil, heavy corporate bond supply and sticky input costs.
Market odds of an October 28 Fed hike fell from about 70% on Monday to roughly 20% by Friday after New York Fed's Williams said there is 'no need for urgency'; Goldman Sachs moved its next-hike call from October to December.
Equities split: the S&P 500 slipped 0.27% to 7,722.72 while the Nasdaq 100 added 0.65% and the Dow fell 1.26%; Goldman notes the index sits about 2% below its record while the median stock is 17% below its own high.
Higher real yields hit precious metals, with spot gold down 3.38% to $4,140.68 and silver off 6.1%; WTI slipped 1.28% to $91.26 despite Iran headlines as Gulf flows through Hormuz returned to pre-war levels.
AI drove earnings: Micron reported $54.23bn revenue and guided to $60-63bn, Nvidia lifted its buyback authorisation to a record $235bn, and Accenture jumped 15.8%; Goldman expects Q3 S&P 500 EPS growth of 27%, with AI infrastructure over half of it.

Generated by Kristal AI · reviewed by the research desk

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