Nasdaq 100 Hits Record High as Soft Payrolls Quell Rate Hike Bets: Oct. 2, 2026 — 2026-10-02
What moved & why: September nonfarm payrolls missed badly at 29k vs. 90k consensus, with prior months revised down 60k combined, crushing Fed rate-hike odds to 20% and igniting broad risk-on sentiment. G7's announcement to release up to 100M barrels of oil provided additional tailwind for equities and fixed income.
Cross-asset:
- Equities: Nasdaq 100 hit record high; all four major benchmarks, 11 sectors, and subcategories advanced.
- Rates/Treasuries: Yields eased; bull-flattening underway with longer tenors outperforming short end as rate-hike bets collapsed.
- Dollar: Recovered to flatline after initial weakness; credit paring session gains.
- Oil/Commodities: WTI crude dropped below $90; commodities depreciate broadly.
- Crypto: Benefiting from looser financial conditions and improving sentiment.
Econ / Fed angle: Unemployment rose to 4.2% (vs. 4.1% forecast) as labor force expanded 485k; wage growth cooled to 0.1% m/m and 3% y/y (both 0.2% below expectations), with AI-driven automation in information, finance, and professional services cutting 26k jobs combined. Fed cannot hike another 100 bps from current pricing; core inflation cooling and energy remains sole meaningful price pressure. Geopolitical resolution would accelerate move toward 2% inflation target, but oil supply fears already addressed by Saudi pipelines, US military escorts, and SPR releases.
Watch next: Unfavorable seasonal dynamics remaining in October; year-end rally potential for equities and fixed income if trends hold. ECB (2.5% rate as of early September) and BoJ (1.25% as of last month, next meeting Oct. 29–30) policy paths amid persistent international inflation—Tokyo CPI at 3% core vs. 2.4% forecast signals further BoJ tightening likely in December.