US equities pushed higher despite soft September US employment data, with the S&P 500 reaching weekly highs and the Nasdaq Composite setting a fresh record. Rate expectations shifted quickly: the probability of a Fed hike at the next meeting dropped to 18% from 71% a week earlier, lending support to risk assets even as geopolitical tensions and Treasury yields at their highest since 2002 weighed on sentiment.
Earnings and Growth Expectations
Earnings expectations are doing much of the heavy lifting. Wall Street is projecting a 65% rise in technology sector EPS for July–September, which would help lift projected EPS growth for the full S&P 500 to 24% and mark a third straight quarter above 20%. Macro momentum also remains firm, with the Atlanta Fed’s leading indicator pointing to third-quarter growth accelerating from 2.2% to 3.7%.
Yield Movements and Market Risks
Meanwhile, 10-year Treasury yields moving above 5% have not yet triggered broad alarm; one benchmark argues it typically takes a 100-basis-point move to pressure valuations, implying greater sensitivity as yields near 6%. A stronger US dollar is also framed as a headwind, while traders watch the USD index, bond yields and the small-cap index’s 200-day moving average for risk signals.
