Global stocks rose on Friday, October 2, 2026, as a sharp bond sell-off eased and weaker-than-expected U.S. jobs data cooled expectations for further Federal Reserve interest rate hikes. Major indexes on Wall Street climbed, while oil prices retreated below $100 a barrel amid shifting geopolitical and supply conditions.
Treasury yields pulled back from multi-decade highs, giving equities room to recover losses sustained earlier in the week. Financial markets found stability at the end of the week following turbulence across global sovereign debt and currency exchanges. U.S. employment figures that came in well below consensus forecasts altered trader bets on monetary policy.
U.S. Payrolls Slowdown Cools Federal Reserve Rate Expectations
The U.S. Labor Department reported that nonfarm payrolls increased by 29,000 jobs in September. The figure fell far short of the approximately 90,000 jobs anticipated by economists polled by Reuters, and marked a sharp deceleration from August. August hiring was cut to 133,000, leaving combined employment for those two months 60,000 lower than previously reported.
Traders dialed back the probability of an October interest rate hike to less than 23%, down sharply from 64% just a week earlier following the Fed’s rate increase in September—its first in three years, according to data from CME Group.
Adam Schickling, senior economist at Vanguard, noted that the report strengthens the case for the Federal Reserve to remain patient.
Global Bond Yields Retreat From Multi-Decade Highs
The benchmark 10-year U.S. Treasury yield touched 5.34% on Thursday—its highest level since 2002—before easing back. Prior to Friday’s employment report, international debt markets suffered a punishing sell-off driven by escalating energy prices from the Middle East conflict and mounting government debt that pushed investors to demand higher returns.
The 10-year Treasury yield fell 6 basis points to 5.1717% on Friday. Fixed-income analysts warned that structural fiscal pressures remain severe despite the daily relief.
Sovereign debt divergence deepened in Europe. That widened the yield spread between French and German borrowing costs to more than 150 basis points—the widest gap recorded since the euro zone debt crisis in 2011.
Lagarias added that if the bond market turbulence persists for a couple more weeks, discussions would turn explicitly toward a fixed-income crisis.
Wall Street and European Equities Stage a Rebound
The Nasdaq Composite led major Wall Street indexes by gaining 319 points, or 1.2%, to close at 27,191 as rate-hike fears faded. Equities across North America and Europe advanced. The S&P 500 rose 56 points, or 0.7%, to 7,723, pulling within 1% of its August record high. The Dow Jones Industrial Average added 250 points, or 0.5%, to finish at 51,177.
Nvidia reached an all-time high in New York, while ASML surged 3.51% to lead the EURO STOXX 50 index to a closing level of 6,238.50. Rate-sensitive sectors and technology shares captured the strongest inflows. The pan-regional STOXX 600 index rose 0.8% across Europe, though it booked a weekly decline of about 1%.
Trading was mixed at the close of the week in Asia. Japan’s Nikkei 225 dropped 0.9%, though it recorded a weekly gain of nearly 3%. Hong Kong’s Hang Seng index fell 2.6%, while South Korea’s Kospi added 0.5%, and mainland Chinese markets remained closed for public holidays.
Crude Prices Retreat as Supply Concerns Ease
Brent crude, the international standard, lost 2.7% to settle at $99.45 a barrel, falling below the $100 threshold after advancing earlier in the week. Energy markets provided additional relief to equity and bond investors as crude prices moved lower. U.S. West Texas Intermediate (WTI) crude futures dropped 3.8% to $89.34 a barrel.
European leaders discussed proposals to release additional diesel stockpiles in response to U.S. requests, which brought the pullback in energy costs. The drop occurred even as an additional aircraft carrier is due to arrive in the Middle East by the end of November amid ongoing geopolitical tensions involving Iran.