Payrolls decide October. Crude gives back $3

Rundown · 2026-10-02

September payrolls at 08:30 are the only print that matters today, and the market has already moved a long way toward a hold. The 2-year fell 10.6bp on Thursday to 4.802%, and October hike odds are now about 25%-28% (Polymarket 24.5%, Kalshi 27.5% at 06:43 ET via DeFi Rate; CME-based reports about 28%), down from about 37% on Thursday morning. December is still about 80%. Against that, Dallas Fed President Logan said on Thursday evening that rates need to rise by at least another 50bp. Consensus is 90K (Trading Economics; MarketWatch has 84K) against 162K in August, with unemployment at 4.1%. Overnight, WTI is $89.58, -$3.29 (-3.54%), giving back all of Thursday's gain, and Nike is -10.8% pre-market after guiding sales lower for the year. Index futures are higher: ES +0.41%, NQ +0.70%.

Overnight

Against Thursday's settles, as of 06:29 ET (delayed, MarketWatch). ES (Dec) 7,755.75, +31.75 (+0.41%) from 7,724.00 · NQ 30,975.50, +215.00 (+0.70%) from 30,760.50 · YM 51,454, +213 (+0.42%) from 51,241 · RTY 2,840.7, +13.8 (+0.49%) from 2,826.9
Thursday's settles reconcile with Wednesday's. ES +8.50 (+0.11%) · NQ +61.75 (+0.20%) · YM -37 (-0.07%) · RTY +9.4 (+0.33%). Yahoo Finance's 06:00 futures quotes match MarketWatch within a few ticks
Reference levels, and nothing more. Globex ranges so far: ES 7,723.25-7,765.75 · NQ 30,760.25-31,035.50 · YM 51,208-51,531 · RTY 2,827.7-2,848.1. All four opened at or near Thursday's settle and are trading in the upper part of their ranges. The NQ contract high is 31,151.50, set Thursday morning. Payrolls print into these ranges 60 minutes before the cash open
Asia was lower. Nikkei 68,309.46, -647.26 (-0.94%), giving back part of Thursday's 3.3% chip rally. Tokyo core CPI rose 2.7% against 2.4% expected, the fastest in 10 months, per InvestingLive, and a Japanese minister said Japan has "no need for excessively loose monetary policy". Hang Seng 23,972.29, -640.98 (-2.60%) on its return from the National Day holiday, without Stock Connect flows. The desk could not source a single catalyst for the fall beyond catching up with two days of global bond selling. Mainland China is closed until 8 October
Europe is mixed, and the euro-area CPI was hot. DAX 25,095.35, +0.63% · FTSE 100 10,418.60, -0.09% · STOXX 600 +0.41% (mid-morning, MarketWatch). Euro-area flash CPI was 3.8% in September against 3.6% expected and 3.2% in August. Core was 2.5%, in line, per Trading Economics. The euro did not react much
Iran: no new development overnight. Tehran is still reviewing the US counterproposal on a ceasefire and reopening Hormuz, delivered through Qatar on Wednesday. The two sides agree on the steps but not their order, per AP. The US is sending a third aircraft carrier and up to 10,000 more troops to the region, per Reuters reporting on Thursday

The Dollar & FX

DXY 101.94, -0.16 (-0.16%) from 102.10 (ICE, via MarketWatch), range 101.79-102.13. Thursday's close was +0.65 and the 52-week high is now 102.21, set on Thursday. MarketWatch called it an 18-month high. The dollar is slightly lower this morning because hike odds have fallen. It is still close to the high because Europe's problems are larger than the Fed's
6E is carrying the move again, and the reason is France. EUR/USD 1.1236, -0.0007 (-0.06%) from 1.1243, range 1.1229-1.1272. It fell 0.0088 (-0.78%) on Thursday and made a 52-week low of 1.1215. France presented its 2027 budget as its 10-year yield hit its highest level since 2002, per FXStreet. A 3.8% euro-area inflation print would normally support the euro through ECB hike expectations. This morning it did not
6J is the strongest major. USD/JPY 157.57, -0.51 (-0.32%) from 158.07, range 157.47-158.22. The hot Tokyo CPI and the minister's comment both support a BOJ hike at the 29-30 October meeting. The 10-year Treasury yield is also lower, which helps the yen
6C is weaker on crude. USD/CAD 1.4237, +0.0015 (+0.11%) from 1.4222, range 1.4203-1.4243. The 52-week high is 1.4265. A 3.5% fall in WTI is the main reason
6B and 6A are slightly firmer. GBP/USD 1.3207, +0.0013 (+0.10%) from 1.3194, range 1.3180-1.3223. AUD/USD 0.6937, +0.0007 (+0.10%) from 0.6930, range 0.6912-0.6947. The Aussie fell on Thursday to its lowest since early July, per InvestingLive
October hike odds: about 25%-28%, December about 80%. Polymarket 24.5% and Kalshi 27.5% for October, Kalshi 82% and Polymarket 79.5% for December (DeFi Rate, 06:43 ET). FXStreet's CME-derived figures are 24.9% and 79.4%. Logan (Dallas, a 2026 voter) said on Thursday evening that the Fed needs to raise rates by "at least another half a percentage point". Vice Chair Jefferson said on Thursday that the Fed should "watch and assess" whether inflation comes down in a timely manner, per Yahoo Finance. The market followed Jefferson. Goldman now expects the next hike in December, per InvestingLive

Energy & Metals

CL: November settled $92.87, +$2.45 (+2.71%) on Thursday. Investrade and MarketWatch agree, and it reconciles with Wednesday's $90.42. It is $89.58, -$3.29 (-3.54%) now, range $88.83-$93.51. December is $88.02, so the Nov-Dec spread is $1.56, down from about $2.27 on Thursday morning. RBOB is -3.21% and heating oil -3.26%
Brent: December settled $102.31, +$4.28 (+4.37%), reconciling with $98.03. It is $99.98, -$2.33 (-2.28%) now, range $98.92-$102.85. It is back below $100. Yahoo Finance's live page still shows Brent "around $102"; the MarketWatch quote is used here
The mechanism: Thursday priced the risks, and this morning is pricing the barrels. Thursday's gain came from China suspending most October fuel exports to protect domestic supply, and from the US military buildup. This morning, the Wall Street Journal attributes the fall to Middle East exports recovering. Goldman estimates Gulf exports at 23.3 million barrels a day over the past week, in line with the 2025 average, per Reuters. The Nov-Dec spread narrowing by about $0.70 shows less near-term tightness
GC: December settled $4,202.30, +$15.60 (+0.37%) on Thursday. Investrade and MarketWatch agree, and it reconciles with Wednesday's $4,186.70. It is $4,203.10, +$0.80 (+0.02%) now, range $4,162.90-$4,226.80. Thursday's gain came as yields and the dollar both fell back from their highs. Gold is still -2.72% over five days and well below its 52-week high of $5,626.80. Bank of America warns of downside below $4,000, per InvestingLive. Payrolls will move gold through the 2-year yield
Rates. 10-year 5.234%, -0.8bp from Thursday's 5.242% close (Tullett, via MarketWatch), range 5.226%-5.265%. Thursday's close was -4.9bp, after an intraday high near 5.34%. 2-year 4.793%, -0.9bp from 4.802%, range 4.777%-4.816%. 2s10s is about 44bp, up from about 41bp on Thursday morning, because the front end fell faster

Where We Left Off

Thursday's RTH close, per AP: Dow 50,926.56 (+20.51, +0.04%) · S&P 500 7,666.45 (+14.91, +0.2%) · Nasdaq Composite 26,871.60 (+10.53, +0.04%) · Russell 2000 2,806.63 (+9.76, +0.35%). The Dow and S&P reconcile exactly with Wednesday's published closes. The Nasdaq and Russell are 0.01 off, which is rounding. MarketWatch matches all four independently. Investrade's Dow and S&P changes were slightly off (+21.28, +15.17), and the brief uses AP. The Nasdaq-100 rose +0.31%, the S&P MidCap 400 +1.03% and the Dow Transports +1.15%. The VIX closed at 16.04. For the week, the S&P is -1.0% and the Dow -1.7%
Stocks started lower and recovered as yields fell. ISM manufacturing missed at 54.5 against 55.0, but prices paid jumped to 77.9 against 72.3 expected. On an inflation-heavy ISM, the 2-year still fell 10.6bp. French fiscal worries drove haven buying of Treasuries, per Yahoo Finance, and Jefferson's comments added to it
What carries over: the front end has priced out most of October before payrolls. A strong number has more room to move hike odds than a weak one, because odds are already low

Yesterday's Data

On The Calendar Today

Time ET · Event · Consensus · Prior · Hits

08:30 · Nonfarm payrolls, Sep · 90K TE · 84K MW · 162K · USD · ES/NQ · GC · 6J

08:30 · Private payrolls, Sep · 85K · 127K · USD · ES

08:30 · Manufacturing payrolls, Sep · 10K · 16K · USD · YM

08:30 · Unemployment rate, Sep · 4.1% · 4.1% · USD · GC · ES

08:30 · Average hourly earnings m/m · 0.3% · 0.3% · USD · GC

08:30 · Average hourly earnings y/y · 3.2% TE · 3.1% MW · 3.1% · USD · GC

08:30 · Average weekly hours · 34.3 · 34.4 · USD

10:00 · Factory orders, Aug · 0.1% TE · 0.2% MW · 0.9% · USD

10:00 · Fed's Logan, migration workshop · n/a · n/a · USD · GC

13:00 · Baker Hughes rig count · n/a · 455 oil · 599 total · CL

Any time · Iran's reply to US counterproposal · n/a · n/a · CL · GC · USD · ES

The calendar was enumerated from Trading Economics and cross-checked against MarketWatch's Friday list. Both carry the same releases. Friday's fixed cadence (Baker Hughes at 13:00) is included. Trading Economics times Logan at 10:00; MarketWatch lists her as TBA. Where the two consensus figures differ, both are shown. Already printed this morning: euro-area flash CPI 3.8% at 05:00 ET (see FX).

The fulcrum is payrolls, and the unemployment rate matters as much as the headline. With October odds at about 26%, a strong report (headline well above 90K, unemployment at or below 4.1%, wages at 0.3% or above) would bring October back into play and test Thursday's 10.6bp fall in the 2-year. A weak report (headline near zero or unemployment at 4.2%) would confirm what is already mostly priced, so the reaction could be smaller. Remember that July was -23K against an 83K forecast, so this series has missed by a wide margin recently.

Next week: ISM services Monday (55.7 expected), the trade balance Tuesday, and FOMC minutes Wednesday at 14:00.

Index Movers

Ranked by index contribution. The Dow is price-weighted, so $1 in any constituent is worth about 5.9 Dow points (divisor about 0.168, secondary source; treat these as approximate). Closes and pre-market quotes are from MarketWatch, about 06:42 ET.

CAT $826.35, +$15.56 (+1.92%) on Thursday, worth about +92 Dow points, more than four times the Dow's 20.51-point gain. It recovered almost all of Wednesday's $15.85 fall. IBM $225.62, +$5.69 (+2.59%) added about +34, on Accenture's results. GS -$3.69 (-0.41%) and AAPL -$2.70 (-0.81%) took about -22 and -16. Without CAT and IBM, the Dow would have been down about 100 points. CAT is +0.37% and GS +0.48% pre-market
NKE $31.36, -$3.79 (-10.78%) pre-market from a $35.15 close. That is worth about -22 Dow points at the open, so the stock is a bigger story than an index driver. Fiscal Q1 revenue was $11.21B, down 4%, against $11.33B expected, and EPS was $0.48. Nike expects fiscal 2027 revenue to fall by a high single-digit percentage and is cutting jobs, per Yahoo Finance. The stock is down 44.8% this year
NVDA $233.70, +1.23% pre-market after +1.09% on Thursday. It is the largest weight in both ES and NQ, and Barron's says it is close to a record high. MU $1,108.40, +1.00% pre-market after +3.03% on Thursday, a day after its results. MSFT +0.74% pre-market. These three names explain most of NQ's lead over ES this morning
GOOGL $338.24, -$5.84 (-1.70%) on Thursday was the largest drag on NDX and the S&P among the names checked. It is +0.71% pre-market
ACN $212.30, +$28.93 (+15.78%) on Thursday after its results. It is an S&P 500 name only, and the move pushed IBM higher in the Dow. ON +6.5% pre-market (S&P 500 and NDX); the desk could not confirm a catalyst

What Would Change The Read

Scoring Thursday's calls. We called ISM the fulcrum. Prices paid was much hotter than expected (77.9), and the long end rallied anyway: the 10-year closed at 5.242%, below the 5.347% high we flagged. We asked whether EUR/USD would hold 1.1292. It did not, falling to 1.1215. We asked whether Brent would hold $100 on the December contract. It settled at $102.31 and is back at $99.98 this morning. We asked whether NQ could stay ahead of YM. It did: NQ +0.20%, YM -0.07% at the settle
Whether the 2-year holds Thursday's fall. It is 4.793% against a 4.966% 52-week high. Payrolls are the test. If it rises back above 4.85%-4.90%, the market has started pricing October again
Whether EUR/USD holds above 1.1215. That is the 52-week low. A strong US report and continued French bond selling would put the pair below it. A hot euro-area CPI has not helped so far
Whether WTI holds below $90. It is back below the level it crossed on Wednesday. Iran's reply and the Baker Hughes count are the remaining catalysts. The narrowing Nov-Dec spread suggests the market is less worried about near-term supply
Whether NKE's fall stays contained. At about 22 Dow points, it will not move YM much. The question is whether its weak consumer outlook affects other consumer names

The Bottom Line

The front end of the curve has moved a long way toward the doves: the 2-year fell 10.6bp on Thursday, even though ISM prices paid was hot and Logan wants another 50bp. That leaves October at about one in four, and it leaves room for a strong payrolls report to move prices more than a weak one. Oil is back near $90 as Gulf exports recover, the dollar is just off an 18-month high because of the euro, and NQ is leading on chip names. Nothing else on the calendar is likely to compete with 08:30.

_For informational purposes only. Not investment advice._