The Only Thing That Mattered Today (October 1, 2025)
The Main Story: The S&P 500 and Dow Jones Industrial Average closed at new record highs, despite the official start of a U.S. government shutdown and the release of shockingly weak jobs data. Private-sector payroll provider ADP reported that U.S. companies cut 32,000 jobs in September, a significant contraction that immediately caused a rally in the bond market, with the 10-year Treasury yield sinking to 4.10% from 4.16% the day prior.
The Signal: The single most important signal was the shock decline in the 10-year Treasury yield, driven by the weak ADP jobs report. The bond market’s reaction definitively confirmed a heightened expectation of an imminent, aggressive Federal Reserve pivot, with the CME FedWatch Tool pricing in an approximate 95% chance of a rate cut later this month. This price action reveals the market’s deepest underlying belief: that ‘bad news is good news’ because poor economic data now serves as a direct trigger for the Fed to lower interest rates and support asset prices. Investors largely dismissed the government shutdown and instead anchored their bullish conviction to the certainty of a dovish central bank response to a weakening labor market.
Actionable Takeaway: Until Friday’s official Nonfarm Payrolls report, monitor the Treasury yield curve for confirmation of a persistent slowdown, as falling yields will continue to be the primary fuel for the equity rally.
Disclaimer: This article is for informational purposes only and does not constitute financial, investment, or legal advice. The information provided is a synthesis of publicly available data and expert analysis and should not be considered a recommendation to buy or sell any security. Investing in the stock market involves risk, including the possible loss of principal. Past performance is not indicative of future results. Readers should consult with a qualified financial advisor to determine an investment strategy that is suitable for their own personal financial situation and risk tolerance.
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