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"Hot non-farm payroll data suppresses the market's expectation of a rate cut by the Federal Reserve, and the 'global assets pricing anchor' returns to 4%."
The probability of the Fed cutting interest rates by 50 basis points has plummeted, leading to intensified selling of U.S. Treasury bonds, pushing the 10-year U.S. Treasury yield to break through the important 4% level; the market bets that the interest rate cut before the end of the year will be less than 50 basis points.
US stocks collectively fell by about 1%, with Chinese concept stocks rebounding in a V-shape, US bond yields rising above 4%, and oil prices rising by nearly 4%.
USA stocks and bonds both fell, with the Dow down 400 points, Tesla down 3.7%, Nvidia up over 2%, Chinese concept stocks fell nearly 3% before closing higher, Alibaba and Tencent ADRs rose 2.6%, Li Auto Inc. rose over 4%. The two-year US treasury yield rose nearly 10 basis points, breaking above 4% for the first time since August for both the 2-year and 10-year treasury yields, with the US dollar hovering at a seven-week high since August 16. Brent crude oil closed above $80, reaching a six-week high along with WTI oil climbing above $77. Silver briefly fell more than 2.4%.
10-year Yield Ends Above 4% for First Time Since July on Brighter Economic Picture
The Bull Market Is Nearing Its Second Birthday. Here's Why It Will Likely Continue.
The Fed Is 'Out of Sync.' Why That's Great News for Stocks.
After the unexpectedly strong non-farm data, bond traders are preparing to deal with the scenario of the US economy not landing.
The unexpectedly strong September non-farm employment report in the USA has led to a sharp rise in US bond yields, making the 'no landing' scenario once again a hot topic in the bond market. The 'no landing' scenario is constraining the Fed's room for interest rate cuts, further dampening the buying frenzy for US bonds.
