Asian Stocks Rally as Weak US Jobs Data Cools Fed Rate-Hike Bets

Stock markets across Asia rose on Monday as a much weaker-than-expected United States jobs report fuelled hopes that the Federal Reserve will hold off on raising interest rates this month.

Japan’s Nikkei climbed 2.2% in early trading, Australian shares added 0.5%, and MSCI’s broadest Asia-Pacific index outside Japan edged 0.15% higher, according to Reuters. Futures pointed to gains elsewhere too, with Nasdaq and S&P 500 futures advancing, alongside gains in Eurostoxx 50 and FTSE futures. Trading was thin across Asia, with markets in China, South Korea and Australia’s New South Wales closed for public holidays.

Labour Department data released on Friday showed the US economy added just 29,000 jobs in September, far below expectations of around 84,000, while the unemployment rate ticked up to 4.2% from 4.1%. Payrolls for the two previous months were also revised sharply lower.

Investors quickly slashed bets on an October rate hike: futures markets now price in about a 22% chance, down from 64% a week earlier, according to the CME FedWatch tool. “The risk of further employment losses means that the Fed can’t hike another 100 basis points from here,” Jose Torres, senior economist at Interactive Brokers, told Reuters. Analysts at Commerzbank said markets read the report as reducing the likelihood of a rate increase at the Fed’s October meeting.

The Asian rally extended a Friday rebound on Wall Street, where the tech-heavy Nasdaq ended the week up nearly 0.5%, its largest three-week gain since mid-August, according to Barron’s.

Sources:
– Reuters: Stocks upbeat, dollar wobbles as Fed hike bets recede — https://www.reuters.com/world/china/global-markets-global-markets-2026-10-05/
– Morningstar (Dow Jones): Asian equities rise as weaker-than-expected US jobs data spurs risk appetite — https://www.morningstar.com/news/dow-jones/20261004709/asian-equities-rise-as-weaker-than-expected-us-jobs-data-spurs-risk-appetite