Wall Street got the bit of bad news it was hoping for. Friday’s monthly jobs report showed the U.S. added just 29,000 jobs in September, far fewer than economists expected. The stock market’s response was relief. Major U.S. indexes marched higher, putting the Nasdaq composite and the S&P 500 within striking distance of new all-time highs. Investors took the weaker-than-predicted labor data as a sign that the Federal Reserve would hold off on hiking interest rates. “We were due for a relief rally,” said Jamie Cox, managing partner at Harris Financial Group.
The Nasdaq composite jumped 1.2%, while the S&P 500 advanced 0.7%. The Dow Jones Industrial Average rose 0.5%, or 250 points. Traders piled into riskier corners of the markets, juicing gains in shares of chip makers and companies such as Norwegian Cruise Line and Darden Restaurants. “We’re in a sweet spot,” said Robert Schein, chief investment officer at Blanke Schein Wealth Management.
Investors now see a roughly 77% chance that Fed leaders will hold interest rates steady at their meeting this month, according to CME Fed Watch data. Friday’s gains were an upbeat end to a choppy week. However, Thomas Urano of Sage Advisory said the relief rally appeared temporary, noting “one weak print doesn’t change the outcome.”
On the other hand, Wall Street now grapples with the risk that slower job growth could contribute to a more serious economic slowdown. Schein said market gains for the remainder of 2026 could rest on maintaining the balance between cool-down and downturn.
Source: Wall Street Journal Markets · Summarized by HeadlinesBriefing