Key Takeaways

U.S. nonfarm payrolls increased by just 29,000 in September, while the unemployment rate rose to 4.2%.

July and August payroll figures were revised down by a combined 60,000 jobs, adding to signs of cooling labor market conditions.

Expectations for an October Federal Reserve rate hike declined following the weaker employment report.

U.S. stocks rallied, with the Dow up 0.49%, S&P 500 up about 0.74% and Nasdaq up 1.19%.

Bitcoin briefly attempted to break above $87,000 following the jobs report but was rejected, later falling back to around $84,643.

Bitcoin briefly surged toward $87,000 after weaker-than-expected U.S. employment data reduced expectations for another Federal Reserve interest rate hike in October, but the cryptocurrency failed to hold the move and subsequently retreated.

Meanwhile, U.S. stocks rallied as investors interpreted the softer labor market data as reducing the likelihood of near-term monetary tightening.

The Nasdaq led the gains, while Nvidia reached a new record high amid continued strength in technology stocks.

U.S. Economy Adds Just 29,000 Jobs in September

The U.S. economy added only 29,000 nonfarm payroll jobs in September, substantially below economists' expectations of around 90,000.

The unemployment rate also edged higher to 4.2% from 4.1%.

Previous employment estimates were revised lower as well. July payroll growth was revised from +21,000 to -10,000, while August was reduced from +162,000 to +133,000.

Together, the revisions removed 60,000 jobs from the previous two months' estimates.

Wage growth also moderated, with average hourly earnings rising 0.1% month-on-month and 3.0% from a year earlier.

The combination of slower hiring, higher unemployment and softer wage growth strengthened expectations that the Federal Reserve could hold rates steady at its October meeting rather than deliver another increase.

Fed Rate Hike Expectations Fall After Jobs Report

Markets quickly adjusted their expectations for Federal Reserve policy following the employment report.

The probability of another October rate increase fell substantially, with traders increasingly positioning for the Fed to leave rates unchanged at its next meeting. Reuters reported that October hike expectations had fallen to 22.7%, compared with 64.2% a week earlier.

The labor market data does not necessarily remove the possibility of additional tightening later in the year, particularly if inflation remains elevated.

However, the September jobs report gives policymakers additional evidence that labor demand is cooling, potentially reducing the urgency for another immediate rate increase.

Nasdaq Jumps 1.19% as U.S. Stocks Rally

U.S. equities responded positively to the weaker employment figures.

The Dow Jones Industrial Average gained 0.49%, while the S&P 500 rose approximately 0.74% and the Nasdaq Composite climbed 1.19%.

The technology-heavy Nasdaq led the advance as lower expectations for near-term interest rate increases supported growth and technology shares.

Nvidia gained 1.34% and reached a new all-time high, according to the supplied market data, while Tesla climbed 4.65%.

Dell advanced 3.8%, Broadcom gained 3.35% and ASML rose 3.25%. Accenture and SanDisk moved in the opposite direction, falling 6.27% and 3.79%, respectively.

Bitcoin Tests $87K Before Falling Back

Bitcoin initially responded positively to the softer employment data, briefly surging toward $87,000 as expectations for an October Fed rate hike declined.

The move, however, encountered resistance around the $87,000 level.

BTC subsequently gave back its post-jobs-report gains and fell to approximately $84,643, representing a 24-hour decline of around 0.7% based on the supplied market data.

The rejection suggests Bitcoin has yet to establish a sustained breakout above the $87,000 area despite the more favorable shift in near-term interest rate expectations.

Bitcoin Traders Watch Fed Policy After NFP

The September employment report strengthens evidence that the U.S. labor market is cooling, but inflation remains an important constraint on Federal Reserve policy.

For risk assets, that creates a mixed backdrop.

Slower employment growth reduces pressure on the Fed to continue raising rates immediately, potentially benefiting equities and crypto. At the same time, uncertainty over inflation and the possibility of further tightening later in the year remain key risks.

Bitcoin's failed attempt to hold above $87,000 highlights that distinction.

While weaker jobs data provided an initial macro catalyst for BTC, the subsequent pullback suggests traders may need stronger buying demand — alongside further confirmation of a less restrictive Fed outlook — before Bitcoin can establish a sustained move above its latest resistance zone.