Jobs Report and Inflation Data to Test US Rate Hike Path

Investors are bracing for a crucial week of economic data releases in the US, which could impact interest rate hikes and the stock market's rally. The monthly employment report on October 2 will be closely watched, as will the key inflation gauge.

A strong jobs report could further solidify expectations that the Federal Reserve will raise interest rates again before the year is out, potentially weighing on stocks. However, a good but not great payrolls report would likely be viewed positively by the market.

The 30-year Treasury yield has reached its highest level in over 20 years, while the benchmark 10-year yield has risen above the closely watched 5% threshold. This has created challenges for stocks, including higher borrowing costs and slower economic growth.