Oil jumps, jobs miss, and bond yields do the deciding

A weak US jobs report lifted stocks on hopes the Fed stays put, even as oil surged and gilt and Treasury yields kept climbing. The two moves are telling different stories, and markets chose to believe the convenient one.

Abhineet RaiFounder · Wealth Adviser Week ending Friday 2 October 2026 About a five-minute read

The week in figures

Each figure as at its own date · sources below

Bank Rate 3.75% Unchanged1 Oct ECB refinancing rate 2.65% Unchanged2 Oct Fed funds target 3.75–4.00% Unchanged1 Oct UK 10-year gilt 5.37% +4 bps30 Sept US 10-year Treasury 5.28% +11 bps2 Oct US 2-year Treasury 4.83% +2 bps2 Oct GBP / USD 1.3201 −0.4%2 Oct GBP / EUR 1.1760 +1.2%2 Oct Brent crude $113.96 −1.8%29 Sept

UK CPI inflation 3.1% +0.2 pp31 Aug

A weak jobs report and a strong oil price cannot both be bullish

The week's governing fact is that US payrolls rose by just 29,000 in September, against a forecast of 84,000, and the unemployment rate climbed to 4.2%.1 Equities took this as good news, because a soft labour market makes it easier for the Federal Reserve to leave rates where they are when it meets later this month. The S&P 500 closed the week at 7,722.72 and the Nasdaq Composite at 27,190.86, with Friday's rally doing most of the work after a choppier few sessions.2

What sits awkwardly next to that story is oil. WTI crude rose 12.8% on the week to $96.16 a barrel, and Brent crude stood at $113.96.3 Oil at that level is not a labour-market story, it is an inflation story, and it is the same oil that has been pushing gilt and Treasury yields higher all month. The UK 10-year gilt rose to 5.37% and the US 10-year Treasury to 5.28%, both up on the week, which is not the pattern you would expect if the dominant news were a cooling jobs market.

I read the week as two audiences reacting to two different parts of the same report card, each picking the piece that suits the position it already holds. Equity markets wanted a reason to believe the Fed holds rather than hikes, and the payrolls miss gave them one. Bond markets are still pricing the energy and fiscal pressure that a hold does nothing to relieve, which is why yields did not fall alongside the softer data. That split does not resolve itself just because one side rallied into Friday. It changes nothing about the argument that inflation pressure in Britain and the US is being driven from the supply side, by energy prices, rather than by an overheating jobs market, and a central bank holding rates does not address a cost shock. The coming weeks, with the Fed's next decision and India's own rate call, will show whether that distinction gets priced properly or gets papered over again.

Abhineet RaiFounder · Wealth Adviser, Rai Wealth Management

Equities

US · UK · India

The S&P 500 closed Friday at 7,722.72 and the Nasdaq Composite at 27,190.86, both rising on the day after a weak September jobs report reduced expectations of further Federal Reserve tightening.2
The rally does not erase a choppier week: oil and bond yields had pressured sentiment mid-week before Friday's data-driven turn.2
The FTSE 100 closed at 10,461.95, up on the day but down on the week, having been pulled lower earlier by the same rise in government bond yields and oil prices that lifted its energy stocks.4
India's markets were shut on Friday for a public holiday, leaving the Sensex at Thursday's close of 71,909.70, down on the day as the rupee and bond yields came under pressure ahead of the Reserve Bank of India's meeting next week.5

Rates & Fixed Income

UK · US · India

The Bank of England held Bank Rate at 3.75% at its last meeting, a 6–3 vote in which three members wanted a quarter-point rise, with the Bank now expecting inflation to approach 4% in the new year on the back of higher energy and electricity costs.6
There was no Federal Reserve meeting this week, but the operative rate remains the 3.75–4.00% range set when the Fed raised a quarter point in September, a decision it described as consistent with activity expanding at a solid pace even as inflation stays elevated.7
The US 10-year Treasury yield rose to 5.28% and the UK 10-year gilt to 5.37%, both higher on the week, as oil prices and concern over UK fiscal headroom ahead of the late-October Budget kept pressure on long-dated bonds.8
The Reserve Bank of India meets from 5 to 7 October, with a Reuters poll of economists suggesting many expect its first rate rise since February 2023, a response to inflation running near 4.82% and a weaker rupee.9

Commodities

Oil

WTI crude rose 12.8% on the week to $96.16 a barrel, one of its sharpest weekly moves of the year, while Brent crude eased slightly to $113.96.3
The rise has been tied to escalating tension in the Middle East and the deployment of a third US carrier group, which raised concern over supply even as demand signals stayed mixed.8
Henry Hub natural gas slipped 0.9% on the week to $3.18 per million BTU, a much smaller move that sat apart from the broader energy rally.10

Currencies

GBP

Sterling fell 0.4% against the dollar to 1.3201 and rose 1.2% against the euro to 1.1760, a divergence that says as much about weakness in the single currency as strength in the pound.
The move came as concern over French government debt weighed on the euro, while sterling faced its own pressure from rising gilt yields and fiscal uncertainty ahead of the 28 October Budget.11

What I'm Watching

The week ahead

The Reserve Bank of India's rate decision lands on 7 October, with markets positioned for the first rise since February 2023 on the back of rupee weakness and rising inflation.9
Federal Reserve minutes from the September meeting are due in the coming week, and will show how divided the committee was over a decision that lifted rates into a 3.75–4.00% range even as the labour market was already softening.7
The UK's 28 October Budget is drawing closer, and gilt markets are already pricing the risk that rising yields and energy costs have eaten into the Chancellor's fiscal headroom.8
The next Federal Open Market Committee decision falls on 27–28 October, the first real test of whether the softer September jobs report changes the Fed's path.7

Sources

Market Snapshot figures from Bank of England, ECB Data Portal, New York Fed, US Treasury, EIA and ONS. Contains public sector information licensed under the Open Government Licence v3.0.

Abhineet Rai

Founder · Wealth Adviser, Rai Wealth Management

Abhineet founded Rai Wealth Management after more than two decades in banking, including spells as a Director in Private Banking at Credit Suisse, Bank of Singapore and HSBC Private Bank in London. He trained at the National Defence Academy in India before taking an MBA, and holds certifications in Investment Planning, Securities & Derivatives, and Regulated Mortgage advice.

20+ years in banking
Credit Suisse · Bank of Singapore · HSBC
NDA-trained, then MBA

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