Invest1 publisher3 min readPublished
Nasdaq rises 0.45% for the week, led by AI demand, as payrolls miss by 55,000
September payrolls of 29,000, against an 84,000 consensus, lifted the Nasdaq 1.2% on Friday and turned a losing week into a 0.45% gain. Every major index was down through Thursday, so the AI-led advance depends on the Fed staying on hold.
The Investor · Invest desk
What happened
- Unemployment rose to 4.2%, a tenth of a point above the 4.1% the Dow Jones consensus had expected.
- CME FedWatch priced a 78% chance the Fed holds rates at its late October meeting, up from 36% a week earlier.
- The Dow lost 1.26% and the S&P 500 fell 0.3% for the week as elevated oil prices and rising long-term bond yields pressured much of the market.
- Nvidia hit its first all-time high since May on Friday, and CrowdStrike, Palo Alto Networks and AMD also reached all-time highs.
- Oil fell back on Friday after a report that European governments are considering releasing strategic fuel reserves, easing a drag tied to the war in Iran.
Compiled by The InvestorSomething wrong?How this is made
Why it matters
- exposure Equity gains now depend on data staying soft enough to keep a Fed hike off the table, and hold odds that moved this far on one jobs print and one PCE reading can move back on the next pair.
- decision Nvidia's remaining buyback authorization equals about 53% of the roughly $440 billion in free cash flow Wall Street expects over six quarters, leaving about $205 billion for investment if that estimate holds.
- constraint Micron's growing cash pile is held back from a significant buyback until CHIPS Act funding restrictions ease in December, so for now its spending goes into the capacity investors sold the stock over.
Take Friday out and all three averages lost ground. On the weekly and Friday figures CNBC reported, the Dow was down roughly 1.75% through Thursday, the S&P 500 about 1% and the Nasdaq about 0.7% [1]. Micron reported on Wednesday [11], inside the four days over which the Nasdaq lost ground. The index's AI-led weekly gain [6] was made in one session, the one that brought the jobs miss and a dip in oil [10].
The good news in the bad number is narrow. CNBC's reading is that a payrolls print about a third the size of consensus [2] was soft enough to make a hold more likely than a hike at the Fed's late October meeting [4]. Wednesday's cooler August PCE figure sent the same message [4]. On the FedWatch figures, the probability of anything other than a hold fell from 64% to 22% in a week [3].
If AI demand alone were carrying the market, the Nasdaq would have held up through Thursday, and it did not [1]. A second reading is that AI leadership is a rate trade that lasts as long as the hold odds do. A third is narrower: investors paid for cash returned and sold cash invested.
Micron is the case for the third. It guided to $61.5 billion of revenue for the first quarter of fiscal 2027, about 13% above the $54.23 billion quarter it just reported [4]. Roughly 75% of its expected 2027 output is already spoken for, and it has 26 strategic customer agreements, up from 16 last quarter [14]. The shares still fell 0.7% for the week as investors focused on plans to spend more on manufacturing capacity and the risk that new supply drives memory prices down [12]. Jim Cramer said the outlook for the next couple of years was "the best that I've ever heard" [15], and CNBC's Investing Club raised its price target to $1,200 from $1,100 [16].
Nvidia went the other way with its cash. It added $150 billion to its repurchase authorization, taking the remaining total to $235 billion [18] from about $85 billion [5]. The stock is up roughly 24% this year and ranks among the weaker performers in the iShares Semiconductor ETF, even as adjusted EPS more than doubled in back-to-back quarters [20].
I think the week's AI gains depended on the rate move. They arrived on jobs day, not on Wednesday, when Micron reported [11]. The counter-case is that oil and long-term yields, which pressured much of the market all week [7], were also weighing on AI stocks, and Friday only lifted that drag. One session cannot tell those readings apart. The view is wrong if the Nasdaq keeps rising through a week when jobs or inflation data run hot and the FedWatch hold probability slides back toward the 36% of a week ago [5].
What to watch
- The Fed's late-October meeting: a hike against FedWatch's 78% hold pricing would remove the premise of Friday's rally.
- Whether European governments follow through on releasing strategic fuel reserves, the report behind Friday's oil pullback.