The week began under pressure as long-term Treasury yields continued their climb. It ended on a considerably brighter note Friday after a softer-than-expected September employment report gave investors another piece of information to consider when assessing the path of monetary policy.
Along the way, September and the third quarter came to a close, earnings provided some dramatic individual-stock stories, and artificial intelligence remained firmly planted in the financial headlines.
Monday: Rates Start the Week in Charge
Stocks began Monday in negative territory as Treasury yields moved higher.
The Dow Jones Industrial Average declined 0.67%, the S&P 500 fell 0.77%, and the Nasdaq Composite lost 0.92%. The 10-year Treasury yield climbed above 5.2%, while the 30-year yield topped 5.5%. [cnbc.com], [investopedia.com]
One of Monday’s biggest individual stories came from Boeing, which fell nearly 7% after the Federal Aviation Administration said it would not certify the 737 MAX 10 until it assessed a newly disclosed software issue. [cnbc.com]
Meanwhile, Nvidia moved against much of the technology group, gaining about 1.7% after announcing plans for an additional $150 billion in share repurchases. [cnbc.com]
Tuesday: The Bond Market Keeps Talking
Tuesday brought another modestly negative session as long-term rates remained elevated.
By this point, the central question for markets wasn’t simply whether interest rates were “high.” Investors were dealing with yields at levels not seen for many years, making the bond market an increasingly important part of the equity-market conversation.
That tension between economic growth, inflation and borrowing costs became one of the defining themes of the week.
Wednesday: Goodbye September, Hello Earnings
Wednesday marked the end of September and the third quarter.
September itself illustrated just how different various parts of the market can perform. The S&P 500 declined about 0.5% for the month, while the Dow Jones Industrial Average dropped 4.3%. By contrast, the technology-heavy Nasdaq Composite advanced 1.9%. [finance.yahoo.com]
September has a long-standing reputation for challenging markets, but seasonal tendencies are historical observations rather than predictions. Results vary from year to year, and past monthly patterns should not be interpreted as an indication of what subsequent months will bring.
Then, after Wednesday’s close, came one of the week’s notable earnings reports.
Micron Technology reported fiscal fourth-quarter adjusted earnings of $33.42 per share, with revenue reaching $54.23 billion, up sharply from the prior-year period. Despite the magnitude of the reported numbers, the immediate stock reaction was relatively restrained. [zacks.com]
That’s an interesting reminder that a company’s financial results and the market’s reaction to those results are two different things.
Thursday: Accenture Takes Center Stage
Thursday gave us almost the opposite example.
Accenture reported quarterly revenue of $18.68 billion, with earnings and revenue exceeding cited consensus expectations. The company also reported record full-year bookings of $84.5 billion, and the shares responded with a dramatic double-digit advance. [247wallst.com], [marketbeat.com]
The contrast was striking:
Micron Technology reported substantial financial growth with a comparatively muted immediate reaction. Accenture reported favorable results and experienced an outsized stock-price response.
Neither reaction tells investors what will happen next. It simply demonstrates that expectations matter alongside the underlying numbers.
Long-term interest rates also remained an important part of Thursday’s narrative. The 10-year Treasury yield reached 5.344% intraday, its highest level since April 2002, before retreating later in the session. [zacks.com]
Friday: Jobs Give Wall Street Something New to Digest
Then came Friday’s September employment report.
U.S. employers added just 29,000 jobs in September, while the unemployment rate increased to 4.2% from 4.1% in August. Average hourly earnings increased 0.1% for the month and 3.0% compared with a year earlier. [stl.news], [thestreet.com]
Stocks responded positively.
The S&P 500 rose 0.73% to 7,722.77, the Dow Jones Industrial Average gained 0.49% to 51,176.96, and the Nasdaq Composite advanced 1.19% to 27,192.87. [vistapglobal.com]
Friday’s rally noticeably improved the week’s final numbers. Using the September 25 and October 2 closing levels, the S&P 500 finished the week only modestly lower, the Dow Jones Industrial Average remained lower, while the Nasdaq Composite finished modestly higher. [vistapglobal.com], [dowjones.com]
The important point isn’t that weaker employment is inherently favorable for stocks. Rather, Friday’s market reaction reflected investors adjusting to new economic information and reconsidering the interest-rate backdrop. The employment report is one data point among many that policymakers and investors evaluate.
The Week in Three Words
Rates. Earnings. Jobs.
That’s probably the simplest way to describe the past five trading days.
Rates commanded attention as long-term Treasury yields reached multidecade levels. [investopedia.com], [zacks.com]
Earnings produced dramatically different stories from companies including Micron Technology and Accenture. [zacks.com], [247wallst.com]
And finally, jobs changed the conversation Friday after September payroll growth came in below expectations. [thestreet.com], [stl.news]
One Last Thought
Perhaps this week’s most interesting lesson was how quickly the market’s focus shifted.
Monday began with investors worried about rising Treasury yields. By Wednesday, attention turned toward inflation and corporate earnings. Thursday produced some dramatic individual-stock moves. And by Friday morning, employment had become the dominant economic story.
Markets don’t necessarily move according to one narrative for very long.
That’s why our Week in Review is intended to document what happened and provide context around those events, rather than attempt to predict what comes next.
And with September and the third quarter now behind us, October begins with investors still balancing corporate earnings, economic growth, inflation, employment and historically elevated long-term interest rates.
Important Disclosure
This commentary is provided solely for informational and educational purposes and should not be considered a recommendation or solicitation to buy, sell, or hold any security, sector, index, or investment strategy. References to individual securities are included to illustrate publicly reported market events and do not constitute investment recommendations. Historical, seasonal, monthly and weekly performance should not be viewed as predictive of future results. Market conditions and economic data can change, and past performance does not guarantee future results. Investing involves risk, including possible loss of principal.