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The US economy added 336,000 jobs in September, crushing the Dow Jones consensus estimate of 170,000, according to non-farm payroll (NFP) data. The report triggered a decline in US stock market futures as investors’ concerns over an even more hawkish Federal Reserve grew. 

Job Growth Smashes Estimates 

The latest non-farm payroll report on Friday showed that job growth was vastly stronger than expected in September, underscoring the US economy’s resilience despite record-high interest rates and labor market struggles.

Notably, nonfarm payrolls rose by 336,000 last month, nearly twice the Dow Jones consensus projection of 170,000. Sector-wise, leisure and hospitality fueled the growth with 96,000 new job additions, followed by government at 73,000 and healthcare at 41,000, among others. 

Meanwhile, wage growth was slower than anticipated, with average hourly earnings climbing 0.2% in September and 4.2% year-over-year, compared to the respective estimates of 0.3% and 4.3%. The unemployment rate stood at 3.8%, higher than the estimated 3.7%. 

Stock Futures Dip on NFP Report, While Yields Rise 

The report added to the late bearish sentiment among investors, pushing stock market futures into negative territory while already sky-high Treasury yield soared even further. 

The S&P 500 futures fell more than 0.9% to 4,251, while Dow Futures slipped 0.66% to 33,085. Nasdaq Futures also slid more than 1.21% to 14,681. 

At the same time, the yield on the 10-year Treasury jumped to as high as 4.85%, marking its fresh 17-year high. Gold prices declined 0.35% to 1,814 an ounce, down 2.96% on the week and 5.47% from one month ago. 

The negative market reaction came as investors grew increasingly anxious that a continuously strengthening US economy could force the Federal Reserve to keep interest rates higher for longer and perhaps even introduce new hikes to rein in the stubborn inflation and cool down the red-hot labor market. 

Fed’s unprecedented hawkishness has pushed bond yields with longer maturity dates to historical highs, leading to concerns that the bond market rout could soon spill into other sectors, most notably banking.

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