US Jobs Report Sends Mixed Signals to Fed and Markets

Wall Street's main indexes are poised to open higher on Friday after a softer-than-expected jobs report reduced the likelihood of an interest rate hike by the Federal Reserve. The Labor Department reported that nonfarm payrolls increased by 29,000 jobs in September, falling short of economists' forecasts of a 90,000 rise. This development has led investors to bet that the Fed will keep rates on hold this month.

The yield on the benchmark 10-year Treasury note retreated for the second straight day, while oil prices also eased after a report that the European Union discussed additional diesel and crude stock releases. The lower jobs print has boosted sentiment among traders, with some seeing it as good news for stocks.

Todd Schoenberger, chief investment officer at CrossCheck Management, noted that 'the bond market organically did the job of the Fed recently' by pushing yields higher, making a rate hike less necessary. The probability of a 25-basis-point rate hike in October has dropped to 16%, down from 26% before the report.