Stocks were little changed on the week, with U.S. shares modestly ahead of international shares. The path was uneven. The 10-year Treasury yield reached its highest level in more than two decades on Thursday, then eased. Friday’s jobs report came in weaker than expected and pulled interest-rate expectations lower.
| Market | Ticker | Weekly Return | YTD Return |
|---|---|---|---|
| Global Equities | ACWI | -0.1% | 13.8% |
| U.S. Equities | SPY | 0.3% | 13.8% |
| International Equities | ACWX | -0.3% | 14.5% |
| Municipal Bonds | MUB | -0.4% | -3.4% |
| U.S. Core Bonds | AGG | -0.4% | -2.7% |
| 10-Year U.S. Treasury Yield | US10Y | +11 bps to 5.28% | +110 bps to 5.28% |
Source: YCharts. ETF figures represent total returns through Thursday, October 1, compounded with Friday, October 2, price returns. Treasury figures represent changes in yield.
The bond market set the tone again. The 10-year yield reached as high as 5.34% on Thursday, its highest level since 2002, before easing to close at 5.24%. It ended the week at 5.28%.
Friday’s jobs report was soft. Employers added 29,000 jobs in September, and August’s gain was revised down to 133,000 from 162,000. The unemployment rate rose to 4.2%, and wage growth slowed to 3.0% from a year earlier. Earlier in the week, the August PCE inflation reading, the Fed’s preferred gauge, came in lighter than expected.
WTI crude oil traded around $90 to $92 a barrel for much of the week. It remained sensitive to news from the Middle East, and energy prices are still a large part of the inflation picture.
Technology and AI stayed in focus. Micron reported revenue growth of 379% from a year earlier, above the 351% analysts expected, but the stock slipped on concerns about heavy capital spending and slightly lower margins. Investors are watching the cost of AI buildouts as closely as the demand for them.
International stocks lagged. Bond yields rose in other major markets too. UK long-dated government bond yields reached their highest level since 1998, and the yield gap between French and German bonds widened to its widest in 14 years. The U.S. dollar was firm for most of the week and eased after the jobs report. In credit markets, ICE BofA index data show the extra yield on high-yield bonds over Treasuries widened to 3.12% through Wednesday from 2.93% the prior Friday, continuing a widening that began the week before.
The Fed raised rates on September 16 and meets next on October 27–28. This week, New York Fed President John Williams said another increase later this year may be appropriate but that there is no rush. Minneapolis Fed President Neel Kashkari said the softer PCE report did not change his view that prices remain elevated. After the jobs report, futures markets moved toward a hold in October. The Fed appears to be weighing inflation, energy prices, and whether the job market is cooling.
The 10-year Treasury yield. It topped 5.30% this week for the first time since 2002 and ended the week at 5.28%. It reflects how investors view inflation, growth, government borrowing, and the path of interest rates. Moves in either direction affect mortgage rates, corporate borrowing costs, and stock valuations.
Next week is lighter on data. ISM services is due Monday, minutes from the Fed’s September meeting on Wednesday, and University of Michigan consumer sentiment on Friday. Jobless claims come Thursday. A 10-year Treasury note auction is scheduled for Wednesday, and demand is in focus given the level of yields. Fed speakers include Goolsbee on Monday and Logan on Wednesday. Oil prices, an OPEC+ meeting, and the start of third-quarter earnings season round out the week.