US stocks finish mixed as September jobs report misses estimates
U.S. stocks finished the week mixed after a September jobs report showed the economy added 29,000 jobs with unemployment rising to 4.2%, missing consensus estimates. The soft economic data lowered inflation fears, pushing the S&P 500 up 0.7% on Friday while the Nasdaq climbed 1.2% to new highs.
How the September Jobs Report and PCE Data Shaped Fed Rate Expectations
The monthly nonfarm payrolls report released by the government showed job growth falling well short of the Dow Jones consensus estimate of 84,000 net new positions. Unemployment ticked up to 4.2%, crossing past the expected 4.1% mark. This softer-than-expected labor market data arrived alongside Wednesday’s personal consumption expenditures price index, which serves as the Federal Reserve’s preferred inflation gauge. Both reports pointed toward moderating economic pressure.
Following these releases, the CME FedWatch Tool priced in a 78% likelihood that the central bank will hold interest rates steady at its late October meeting. That probability stood at just 36% one week prior. Lower-than-expected job additions removed immediate pressure for monetary tightening.
Oil prices provided additional relief on Friday. European nation-states considered releasing strategic fuel reserves, which pulled crude prices back from recent highs driven by the ongoing war in Iran. Despite Friday’s relief rally across the major averages, the weekly scorecard reflected lingering headwinds. The Dow posted a weekly loss of 1.26%, and the S&P 500 dropped 0.3%. Elevated oil prices and rising long-term bond yields weighed on broader market sectors throughout the five-day trading window.
Micron Delivers Revenue Amid Production Capacity Concerns
Micron reported revenue surging 379% year-over-year to $54.23 billion, accompanied by adjusted earnings of $33.42 per share that beat Wall Street expectations. Management issued fiscal first-quarter 2027 revenue guidance of $61.5 billion with adjusted earnings per share projected at $38.15. Both figures outpaced consensus analyst estimates.
Despite the blowout financial results, Micron shares came under pressure and ended the week down 0.7%. Investors focused on corporate plans to increase capital spending on manufacturing capacity. Market participants expressed concern that expanding supply could eventually drive down memory prices and compress profit margins.
Micron countered these worries by noting that roughly 75% of its expected 2027 output is already spoken for under long-term agreements. The company secured 26 strategic customer agreements, up from 16 in the previous quarter. Management expects supply-demand conditions to tighten further through 2027 and 2028. An upcoming catalyst approaches in December, when restrictions on CHIPS Act funding lift, potentially allowing Micron to deploy cash toward a significant share buyback program. Analysts raised the price target on the stock to $1,200 from $1,100.
Nvidia Expands Share Repurchases on Massive Free Cash Flow
Nvidia authorized an additional $150 billion in share repurchases, lifting its remaining buyback authorization to $235 billion. Wall Street projections anticipate the semiconductor manufacturer will generate roughly $440 billion in free cash flow over the subsequent six quarters, providing ample liquidity for repurchases without compromising core investments in artificial intelligence infrastructure.
This capital return strategy addresses a notable valuation disconnect. Nvidia shares rose roughly 24% for the year yet lagged other components of the iShares Semiconductor ETF, even as adjusted earnings per share more than doubled in consecutive quarters. On Friday, the stock broke through its previous May all-time intraday high before retreating slightly by the closing bell, finishing the week up 3.95%.
Demand for artificial intelligence hardware propelled the Nasdaq to a weekly gain of 0.45%, serving as the sole major average to finish positive. Alongside Nvidia hitting an all-time high, shares of CrowdStrike, Palo Alto Networks, and AMD also reached all-time highs during the week’s trading sessions.