U.S. hiring slowed, yet stocks finished Friday higher. Weak employment eased concerns that the Fed might raise rates again. The next question is how strong the demand supporting company sales will remain, even if rate pressure eases.

Expectations of lower rates can support technology companies in particular, whose future earnings command high valuations. But weaker employment also affects household income and consumption. The same data can give stocks short-term relief while signaling a tougher period for company profits; both effects deserve attention.

Key takeaways

  • I distinguish the reason behind stock buying: rate pressure easing as inflation slows provides a healthier foundation than rates falling because demand collapses. Slower hiring alone does not settle that distinction.
  • Energy costs and wages are the second area to examine after the employment headline. Even with cheaper borrowing, high input costs and weak sales can limit profits at the same time.
  • When assessing a recovery in gold and silver, I look at the thresholds they reclaim. Precious metals benefiting from lower rates and fully recovering from the previous selloff depend on different conditions.

What changed since yesterday?

  • Yesterday, a strong employment result risked prolonging rate pressure. The weak result eased that concern; the more important question now is whether slower hiring is temporary or part of a broader decline in demand.

What happened?

  • The U.S. Bureau of Labor Statistics reported September payroll growth of 29 thousand and unemployment of 4.2%. Combined employment growth for July and August was also revised down by 60 thousand. It matters that the previous months now look weaker, as well as the latest one.
  • Associated Press's closing report said weaker hiring eased concerns that the Fed could raise rates in October. The S&P 500 rose 0.7% and the Nasdaq Composite gained 1.2%. The market's initial response was positive, but this does not mean the Fed has decided to cut rates.
  • The G7 agreed to release 100 million barrels of crude oil and petroleum products from reserves. According to Associated Press, a substantial share of diesel supply will be brought forward into the first 20 days. This could ease cost pressure; however, the International Energy Agency says problems in Hormuz persist, especially for diesel. Reserve releases alone cannot fix disruptions to refining and transport capacity.
  • Before the employment release, Bora Özkent (@boraozkent) maintained his optimism about U.S. stocks based on growth and artificial intelligence investment. He also emphasized that the initial market reaction could be misleading. I assess the growth side of that view alongside the weak employment result and prior-month revisions; a positive stock market response alone does not prove economic resilience.
  • Friday's U.S. Treasury par yield for the 10-year note was 5.28%. A lower likelihood of a rate increase does not mean companies' borrowing costs immediately fell. The bond market joining the stock recovery would show that financing conditions are supporting the rise.

Market levels

U.S. indexes and chips

  • The Nasdaq 100 ($NDX) closed Friday at 30,807.93, only slightly above the 30,800 resistance in Tunç Şatıroğlu's (@tuncsatiroglu) October 1 assessment. Holding this area next week will matter more than crossing it for a single day; 30,500 is an intermediate threshold and 30,000 is support below. The $QQQ ETF, which tracks the Nasdaq 100, closed at $749.58; index levels do not apply to the ETF's share price.
  • The S&P 500 ($SPX) closed at 7,722.72. It has not reached the 7,775 resistance from the same assessment; trading remains above 7,600 support. I will watch behavior at the upper threshold to assess whether the broader market can keep pace with technology stocks.
  • The $SMH semiconductor ETF closed at $630.60, above the prior $618-$620 resistance area. Holding that area next week will matter for continued buying. The analyst's $600 stop-loss level is a separate risk boundary; I do not interpret it as technical support.

Precious metals

  • Spot gold was at $4,140.06 per troy ounce in Friday's Reuters report. The condition of reclaiming $4,250 in Tunç Şatıroğlu's September 28 analysis remains unmet. The same analysis sets $4,000 as the target in a downside scenario; it is not established support, and I do not see a fall to that level as inevitable.
  • The same report quoted spot silver at $60.36 per troy ounce. The prior analysis's condition of a daily close above $63 and its $56 downside target remain relevant; the target does not establish support. Trading between those thresholds is not enough to say a strong recovery has begun; the daily close will be decisive here.

Red flags

  • Weakening employment can ease rate expectations while hurting the outlook for income and consumption. If companies cut their sales forecasts, the benefit of expectations for cheaper financing will diminish.
  • Oil reserve releases may not lower energy costs. If diesel supply and shipping disruptions continue, pressure on transport, production and ultimately consumer prices will persist.

Calendar

  • Monday, October 5: ISM Services PMI. I will watch whether service demand is holding up despite weak hiring.
  • Wednesday, October 7, at 21:00 Turkey time: minutes of the September 15-16 Fed meeting. How participants discussed the balance between inflation and employment will help explain the next rate decision.

My analysis

This week, I watched how much impact companies' good news could have despite high borrowing costs. The employment data now strengthens the possibility that those costs may not rise further. That is positive for technology stocks; however, I also account for a slowing economy when assessing future revenue expectations. Buying driven by rate expectations can persist only if companies retain their ability to grow and generate cash.

I will first watch whether rate pressure eases in the bond market, then whether gains spread beyond a few large companies. A more balanced recovery is possible if inflation and energy costs ease without hiring coming to a complete halt. But if weaker hiring is accompanied by worsening consumption and company outlooks, I will have less confidence in prices rising solely on hopes for lower rates. Those conditions, rather than the excitement of the first data reaction, will set the limits of my optimism.

Sources

This is not investment advice; it is a research and monitoring note.