US Stocks Hit Fresh Records as Weak Jobs Data Cuts Rate Hike Fears – Nasdaq up 1.3%
US equity markets pushed higher again on Friday, with all three major indices closing at fresh record levels after a much weaker-than-expected US employment report sharply reduced expectations for further Federal Reserve rate hikes. Non-Farm Payrolls came in at -23k, well below the expected +80k, triggering a strong move across financial markets as traders reassessed the outlook for US interest rates.
The weaker jobs data saw Treasury yields fall sharply, with the 2-year US Treasury yield dropping 5.0 basis points to 4.195%, while the 10-year yield declined 3.2 basis points to 4.645%. The US Dollar also came under pressure, with the US Dollar Index falling 0.33% to 99.60.
The lower yield environment provided another boost for equities, with the Dow Jones rising 0.28% to 54,036, while the S&P 500 gained 0.62% to 7,757, with both indices closing at fresh record levels. The technology-heavy Nasdaq outperformed, climbing 1.30% to 26,690, as falling yields continued to support the growth and technology sectors.
Oil prices moved higher despite the broader risk-on environment, with Brent crude gaining 1.28% to US$83.55 a barrel and WTI rising 1.15% to US$78.18. Traders remain focused on developments surrounding the Strait of Hormuz, with the uncertainty surrounding the reopening continuing to keep supply concerns firmly in focus and provide support for energy prices.
Gold also benefited from the weaker dollar and lower Treasury yields, with the precious metal surging 2.42% to US$4,341.71 as traders continued to reassess the interest-rate outlook.
Strait of Hormuz Reopening Still Some Way Off
Hopes of a full reopening of the Strait of Hormuz are starting to fade as it becomes increasingly clear that the US and Iran remain some distance apart on the terms required to restore normal shipping through the key global energy route. While discussions involving Oman have raised hopes of establishing some form of shipping arrangement, Iran is demanding significant concessions from the US before agreeing to a broader reopening. With Washington and Tehran still appearing well apart on the key issues, traders should be wary of assuming that the recent improvement in sentiment around Hormuz will translate into a sustained return to normal shipping.
This leaves Oil exposed to another sharp move higher if negotiations break down or further restrictions are imposed on shipping. Brent and WTI have already shown just how sensitive they are to every headline surrounding the Strait, and any sign that a deal is moving further away could quickly see the geopolitical risk premium return to the market.
For traders, the key message is simple: until there is a clear agreement and ships are moving freely through the Strait again, the risk remains firmly skewed towards higher Oil prices if the diplomatic process stalls.
Quiet Calendar Day to Kick off the Trading Week
With the major US employment report now behind us and little of note scheduled on the macroeconomic calendar today, traders are likely to turn their attention back towards geopolitical developments. Any fresh updates from the Middle East, particularly around the Strait of Hormuz and the conditions surrounding its reopening, could therefore provide the main catalyst for volatility as the day progresses. The only major event on today’s calendar is the Bank of Japan’s Summary of Opinions, which is released early in the Asian session, with traders continuing to monitor Japanese policymakers closely following the recent volatility in the yen.
Explore all upcoming market events in the Economic Calendar.
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The post General Market Analysis – 10/08/26 first appeared on IC Your Trading Edge | Official Blog.