Will the Fed Raise Rates in October? A 29,000-Job Report Says Probably Not

Will the Fed raise rates in October? A week ago most traders thought so. Then Friday’s September jobs report landed: the US economy added just 29,000 jobs and unemployment rose to 4.2%. Within hours, money markets cut the odds of an October hike to below 25%, Treasury yields eased off multi-decade highs, and the Nasdaq 100 closed at a record.

Here is what changed, why one jobs number can flip a rate decision, and what it means if you trade stocks, forex or gold.

Will the Fed Raise Rates in October? What the Market Now Thinks

Short answer: probably not, based on market pricing after the report. The Fed under Chair Kevin Warsh raised rates by 25 basis points in September, reversing part of the easing delivered in 2025, as inflation stayed sticky and oil prices climbed on the US and Iran conflict. As recently as late September, CME data pointed to a better than 70% chance of a second hike in October.

A soft labour market changes that maths. The Fed raises rates to cool an economy that is running too hot. When hiring nearly stalls and unemployment ticks up, the case for squeezing harder gets much weaker, because the economy is already slowing on its own. That is why traders moved quickly to price the Fed on hold.

How Stocks, Yields and the Dollar Reacted

The reaction was textbook “bad news is good news”. Lower odds of a hike mean cheaper borrowing for longer, which helps company valuations, especially growth and tech names.

Stocks rallied. The S&P 500 rose 0.73% to 7,722.72, the Dow added 0.49% to 51,176.96, and the Nasdaq Composite gained 1.19% to 27,190.86. Nvidia touched a new all-time intraday high near $237.55, pushing its market value to roughly $5.7 trillion, and Tesla jumped 5.2% after third-quarter deliveries beat estimates.

Yields eased. US Treasury yields pulled back from their highest levels in more than two decades. Falling yields usually go hand in hand with falling rate expectations.

The dollar softened. Fewer expected hikes make the dollar less attractive to hold, which tends to lift pairs like EUR/USD and weigh on USD/JPY.

“A weak jobs number is bad for workers, but markets read it as a reason for the Fed to stop squeezing.”

What It Means for Gold and Bitcoin

Gold has had a rough few months, down more than 20% from its January record as rates and yields climbed. A Fed that pauses is mildly supportive, because gold pays no interest and looks more attractive when yields stop rising. Bitcoin also moved back above $86,000 into the report, helped by easing yields and short liquidations.

Neither move is a trend on its own. One report rarely settles a Fed decision, and the next inflation print matters just as much. If inflation runs hot, hike odds can climb straight back.

How to Trade the Fed Decision as a Beginner

Rate decisions move the US dollar, stock indices and gold within seconds, and spreads can widen sharply around the announcement. If you plan to trade it, size positions small, set a stop-loss before the release, and avoid chasing the first spike. Many traders simply wait for the press conference to finish and trade the trend that follows.

The bottom line: after a 29,000-job September, the market no longer expects the Fed to raise rates in October. That expectation can change fast, so treat it as the current base case, not a certainty.