The Job Market Cooled. The Ten-Year Didn't

Employers added 29,000 jobs in September and wage growth slowed to 3.0%, yet the ten-year rose 11 basis points on the week. Technology led all eleven sectors and finished as the largest of three in the even-weight strategy.

Brad Roth
October 04, 2026

TL;DR

• Payrolls rose 29,000 in September, about a third of forecasts, and revisions took 60,000 off July and August. Unemployment ticked up to 4.2%.

• The two-year fell 4 basis points on the week and the ten-year rose 11 to 5.277%. The gap between them widened to 45 basis points from 30.

• Technology rose 1.80% and is now the largest of the even-weight strategy's three sectors. The index strategy holds the Nasdaq 100, the S&P 500 and the Dow in near-equal thirds.

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Week in Review

Weekly closes, Friday 10/2/26

• The S&P 500 closed at 7,722.72, down 0.27% on the week.

• The Dow ended at 51,176.96, down 1.26%.

• The Nasdaq Composite finished at 27,190.86, up 0.45%.

• The Russell 2000 closed at 2,832.89, down 0.16%.

• The VIX ended at 15.31 against 14.87 a week ago.

Friday's jobs report was the week. Employers added 29,000 jobs in September. July was revised to a loss of 10,000 and August down to 133,000. Unemployment rose to 4.2%, and average hourly earnings gained 0.1% for the month and 3.0% for the year. Health care added 17,000 of the 29,000. Stocks took it well. The S&P 500 gained 0.73% Friday and the Nasdaq Composite 1.19%.

Long rates didn't follow. The two-year closed at 4.825% against 4.864% a week earlier. The ten-year closed at 5.277% against 5.167%, and the thirty-year at 5.630% against 5.502%. The ten-year touched 5.344% Thursday, the highest since 2002, a day after core PCE for August came in softer than expected at 0.2%. Friday it traded as low as 5.157% after the jobs report and still finished up 4 basis points. Futures moved the odds of a hold at the October 27-28 Fed meeting to 82.8%, per CNBC.

Technology led the eleven sectors, up 1.80%, with semiconductors up 3.96%. Energy added 1.26% and utilities 0.81%. The other eight fell. The equal-weight S&P 500 lost 0.65%, more than twice the cap-weighted index.

West Texas settled Friday at $91.26, down 1.28% on the week, after trading above $96 Monday morning on the Iran standoff. Brent stayed above $100. Gold futures fell 3.43% to $4,172.10 and silver closed at $60.71. Bitcoin ended near $84,500.

Allocation Changes

Both systematic strategies held their shape. Same three benchmarks, same three sectors, same 40% in bills.

The index strategy holds the Nasdaq 100 at 34.1%, the S&P 500 at 33.2% and the Dow at 32.9%. The Nasdaq 100 gained 0.68% this week and the Dow lost 1.23%, and the weights moved with them.

The even-weight strategy holds technology at 20.7%, healthcare at 19.8% and financials at 19.7%, with 40.4% in Treasury bills. Technology moved to the top on price. The three-month bill yields 4.103%, and the strategy collects that on 40% of the portfolio while fewer sectors meet the bar.

The actively managed strategy rotated. The gold income position, 10.7% a week ago, is gone. The broad commodity fund grew to 14.6% from 4.8%, and the bitcoin position to 12.7% from 4.2%. Direct energy fell to 6.6% from 12.9%, and Broadcom and Adobe left. A market-neutral fund came in at 2.9% and T-bills at 1.9%.

The Bigger Picture

A job market adding 29,000 a month usually pulls long rates down. This week it only pulled down the front. The two-year fell 4 basis points and the ten-year rose 11. A curve that steepens from the long end is the bond market asking to be paid more for time. Inflation surprises and record government borrowing in Europe pushed long yields up across several countries at once, and Brent sits above $100. The Treasury tests demand next week with ten-year notes Wednesday and thirty-year bonds Thursday.

Financials sit right on that curve. The sector gave back 2.46% this week. The spread is the longer story. Banks borrow at the short end and lend further out. The gap between the two-year and the ten-year widened 15 basis points in five sessions. Healthcare is the other side of the jobs report. Demand for care doesn't wait on the hiring cycle. The sector gave back 2.65% this week after finishing the third quarter second of eleven.

Technology rose 1.80% in a week the ten-year added 11 basis points. The sector is trading on earnings, mostly chips. Equal weight owns it at roughly a fifth, the same size as each of the other two. The index strategy owns the same leadership a different way. The Nasdaq 100 closed Friday at a 52-week high, and it's a third of the portfolio next to the S&P 500 and the Dow.

THOR Risk Gauge

Neutral. The index strategy is 99.7% invested and the even-weight strategy holds 60.2% in three sectors, with 40.4% in bills. September's soft payrolls should ease the case for another hike in October. A ten-year near a 24-year high, with two long auctions next week, is the offset.

Signal Watch

THOR Index Rotation — As of 10/2/26

Fully invested in near-equal thirds. The Nasdaq 100 beat the Dow by almost two points this week, and it's now the largest of the three on price alone.

THOR Low Volatility — As of 10/2/26

Technology moved to the top on price. Healthcare and financials sit a tenth of a point apart just behind it, and the bills round out the other 40%.

THOR AdaptiveRisk Dynamic — As of 10/2/26

The actively managed strategy runs 45.4% in equities, down from 59.0% a week ago, and 18.9% in alternatives. Commodities hold 14.6%, specialty currency exposure 14.4%, and rate hedges plus bills 6.6%. Alternatives tripled in a week as the bitcoin and ether positions grew and a market-neutral fund came in. The long dollar position held steady at 14.4%.

Weekend Reading

Behind the Ticker — The Only ETF Holding Kalshi and Polymarket, with Paisley Nardini of Tema ETFs. Nardini joined Tema as head of investment strategy in September, after a career that started in fixed income trading. She walks through Tema's new prediction markets fund. It owns the exchanges and brokers behind the activity, plus a 15% private sleeve in Kalshi and Polymarket.

Labor market faltered in September as jobs increased by just 29,000, unemployment rate rose to 4.2% (CNBC, October 2). Jeff Cox on the report and the revisions underneath it. Read it for the rate reaction. Hold odds for October jumped above 80%, and a Jefferies economist called it the end of the case for an October hike.

Global bond rout gathers pace as debt fears grow (Semafor, October 1). Prashant Rao on why long yields are climbing in several countries at once. Inflation surprises across Europe and record French bond sales put the American ten-year move in a global frame.

Gold bulls disappointed as weak jobs report fails to spark rally, $4,000 support looms (Kitco News, October 2). Neils Christensen on why a soft jobs number didn't help gold. Rate-hike pricing for December keeps yields high.

Quote of the Week

"[Interest rates] act on financial valuations the way gravity acts on matter: The higher the rate, the greater the downward pull."

— Warren Buffett, Fortune, "Mr. Buffett on the Stock Market," November 1999

Brad Roth / CIO, THOR Financial Technologies

This content reflects the opinions, analyses, and research of THOR Financial Technologies as of the date published. It is provided for informational and educational purposes only and does not constitute investment advice and should not be relied upon as the basis for any investment decision. Past performance doesn't guarantee future results, and all investments involve risk. For more information, please go to: thorft.com