A weak jobs report usually worries Wall Street, but on Friday, it sent stocks higher. The U.S. economy added just 29,000 jobs in September, far below the 90,000 economists had expected, the Bureau of Labor Statistics said.
The previous two months were revised lower. August payrolls were cut to 133,000 from 162,000. July went from a gain of 21,000 to a loss of 10,000.
Private-sector payrolls rose 46,000, down from 89,000 in August.
Within 30 minutes of the report, a group of rate-sensitive stocks moved to the top of the premarket leaderboard.
A Weak Report Across the Board
The unemployment rate rose to 4.2%, above the 4.1% forecast.
Wages grew 3% from a year earlier, below the 3.2% expected.
The soft labor market also changes the Federal Reserve math. Before the data, Fed futures priced a 23% chance of a 25-basis-point rate hike this month. After the release, that chance fell to 13%, according to CME FedWatch.
The 2-year Treasury yield, which tracks expectations for Fed policy, fell about 6 basis points to 4.72%.
Among companies worth more than $10 billion, these 10 stocks posted the biggest premarket gains in the 30 minutes after the report, as of 8:55 a.m. ET.
| Company | Price | Change |
|---|---|---|
| Entegris Inc. (NASDAQ:ENTG) | $165.44 | +4.39% |
| Rocket Companies Inc. (NYSE:RKT) | $12.55 | +3.54% |
| Banco Santander (Brasil) S.A. (NYSE:BSBR) | $5.53 | +3.17% |
| 10x Genomics Inc. (NASDAQ:TXG) | $90.98 | +2.91% |
| Ross Stores Inc. (NASDAQ:ROST) | $240.80 | +2.79% |
| Innio N.V. (NASDAQ:INIO) | $18.75 | +2.73% |
| KLA Corp. (NASDAQ:KLAC) | $206.20 | +2.67% |
| Cemex S.A.B. de C.V. (NYSE:CX) | $9.61 | +2.56% |
| Forgent Power Solutions (NYSE:FPS) | $39.30 | +2.53% |
| Wheaton Precious Metals Corp. (NYSE:WPM) | $136.87 | +2.50% |
Chipmakers And Housing Lead
Semiconductor equipment led the move. Entegris topped the list, and KLA also gained. Both companies invest heavily and sell into a capital-spending cycle, so lower rates support demand for their products.
Housing-linked names followed. Rocket Companies, one of the largest U.S. mortgage lenders, rose as lower yields point to cheaper mortgages. Cemex, the cement maker, also gained.
Gold miners and emerging markets rounded out the list. Wheaton Precious Metals moved with gold, which rose 0.87% to $4,211 an ounce.
Banco Santander Brasil benefited from a weaker dollar, as the dollar index slipped 0.16%.
In the broader market, the S&P 500 rose 0.41% and the Russell 2000 gained 0.88%.
Economists See Weak Jobs Data Lowering Fed Hike Odds
“Given the overall softness of the labor market, the likelihood of two Fed hikes is getting lower,” Jeffrey Roach, chief economist at LPL Financial, said in a note.
Roach said demand for workers is concentrated in industries that make things, and less so in services. Construction, manufacturing and health care added jobs, while information, financial services and government held back hiring.
“We are seeing the tension between the goods-producing sectors that support the AI boom and the services-producing sectors that are feeling the impact of technological change,” Roach said.
He added that the jump in unemployment does not signal a breakdown. “Despite the uptick in unemployment to 4.2%, the labor market is still operating in a comfortable range,” he said.
Other economists read the report as weaker than expected. “A worse jobs report than I expected,” Guy Berger, senior fellow at the Burning Glass Institute, wrote on X.
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