U.S. stocks started the week on a positive note, with the Nasdaq and S&P 500 futures gaining 0.3% and 0.1% respectively. The rally came as investors trimmed bets on an aggressive Federal Reserve tightening cycle following September job data that showed slower‑than‑expected growth.

Fed rate‑hike expectations recede

Interactive Brokers senior economist Jose Torres noted that revisions to non‑farm payrolls suggest the economy has lost jobs in two of the nine months so far this year, reducing the likelihood of a 100‑basis‑point hike. The CME FedWatch tool now shows a 22% chance of a rate increase this month, down from 64% a week earlier.

Market reactions

The lower Fed‑hike odds helped lift Japan’s Nikkei by 2% and added modest gains to Australian shares (+0.5%) and the MSCI Asia‑Pacific index (+0.15%). In Europe, EUROSTOXX 50 futures rose 0.3% and FTSE futures climbed 0.4%.

Bond markets also steadied. U.S. 10‑year Treasury yields slipped slightly to 5.2643%, while two‑year yields were at 4.8143%. Standard Chartered senior investment strategist Cedric Lam said recent data shows softer inflation, but technical factors may keep yields from falling further in the short term.

Dollar and commodities

The U.S. dollar weakened on the reduced rate‑hike outlook. The euro rose from a 17‑month low to $1.1243, and sterling edged up to $1.3241. The greenback was marginally lower against the yen at 157.81.

BBH global head of markets strategy Elias Haddad warned that tighter policy elsewhere and a possible Fed pause present headwinds for the dollar, yet strong U.S. growth and foreign demand for U.S. securities keep upside risks present.

Oil prices stayed elevated after Yemen’s Iran‑backed Houthis launched ballistic missiles and drones at Saudi Aramco facilities. Brent crude was steady at $102.20 a barrel, while U.S. crude traded around $90.75. Spot gold rose 0.3% to $4,154.32 an ounce.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.