Stocks rise, yields fall as US job numbers disappoint

Wall Street saw stocks climb at market open as investors viewed the weak labor market as diminishing chances of an immediate interest rate hike from the Federal Reserve. US bond yields fell correspondingly. Employment growth in September fell short of forecasts, with 29,000 jobs created compared to the anticipated 90,000. The unemployment rate crept up slightly to 4.2%.

Moreover, the Bureau of Labor Statistics revised down job figures from July and August by 60,000 combined, indicating the US economy shed jobs that month instead of adding 21,000 as initially reported. Analysts cautioned that hoping for a weaker labor market to ease financial conditions might not be the best strategy. The 10-year US Treasury note briefly slipped below 5.2%, while major stock indices enjoyed a strong start to trading.

Markets have been rattled by fresh multi-year peaks in government bond yields, driven by central banks' efforts to curb inflation. Eurozone inflation surged to 3.8% in September, the highest in three years, amid surging energy costs due to the Middle East conflict. The likelihood of the Fed raising rates at its upcoming meeting stood at just 20%, with most expecting a rate increase of a quarter or half percentage point in December.

The Fed had already raised rates for the first time since 2023, with officials emphasizing the need to combat high inflation that had persisted for too long. Inflation remains a concern, according to analysts. Oil prices plummeted as G7 leaders convened to coordinate action on reducing fuel prices after the EU pledged to work with the International Energy Agency on releasing additional stocks to global markets.

European Commission spokeswoman Anna-Kaisa Itkonen rejected any ban on diesel, emphasizing that diesel is a pressing macro issue impacting various sectors, including freight, food, industry, inflation, and ultimately bond yields.