U.S. stock futures extended gains on Friday after weaker-than-expected employment data prompted investors to reduce expectations for additional Federal Reserve interest-rate increases, while falling oil prices provided further support to equities.
Futures tied to the S&P 500 rose 0.9%, while Nasdaq 100 futures gained 0.9%. Dow Jones Industrial Average futures climbed about 460 points following the release of the September employment report.
U.S. Economy Adds Just 29,000 Jobs
U.S. nonfarm payrolls increased by only 29,000 in September, well below market expectations for a gain of about 90,000.
Employment figures for the previous two months were also revised lower, adding to evidence that momentum in the labor market has weakened.
The unemployment rate rose to 4.2%, reinforcing expectations that the Federal Reserve may have less need to tighten monetary policy further.
The employment figures come after recent data showed U.S. job openings falling to a five-month low in August, even as weekly unemployment claims remained historically low.
Fed Rate Expectations Ease
Financial markets adjusted expectations for monetary policy following the jobs report, with investors pricing in less than one additional interest-rate increase for the remainder of 2026.
The reaction reflects the competing pressures facing policymakers. Inflation remains above the Federal Reserve’s 2% target, while the latest employment figures point to a softer labor market.
A decline in oil prices on Friday also helped ease some concerns about additional inflationary pressure from energy costs. The move supported Treasury bonds and provided another boost to stocks.
Major Indexes Still Headed for Weekly Losses
Despite Friday’s rebound, the three major U.S. stock indexes remained on course to finish the week lower.
The S&P 500 was down about 1.2% for the week, putting the benchmark on track for its weakest weekly performance since August. The Dow was down 1.8%, while the Nasdaq had lost about 0.8%.
Friday’s market reaction underscores the changing balance facing investors: weaker employment growth can raise concerns about the strength of the U.S. economy, but it can also reduce expectations for higher interest rates — providing support to stocks and bonds.
