Stocks Up on Firm Tech Despite 24-Year Yield Highs
Published as of: October 1, 2026, 9:13 a.m. ET
(Thursday market open) October begins with the 10-year Treasury note yield just under 24-year highs and investors digesting solid earnings from chip giant Micron (MU). Major indexes climbed early, led by tech, despite another bump in crude.
September nonfarm payrolls arrive at 8:30 a.m. ET tomorrow with consensus at 84,000, down 50% from August but above the three-month average. The looming report could mean unremarkable trading today outside of tech names. "Better-than-expected ADP job growth and GDP point to a healthy economy," said Nathan Peterson, director of derivatives research and strategy at the Schwab Center for Financial Research (SCFR). Wages, he added, are an important jobs report metric after recent data hinted at a tight labor market.
Major indexes ended mostly lower yesterday. An early rally fizzled while longer-term yields continued their relentless rise even as rate hike odds declined. At 10 a.m. ET today, investors get the September ISM Manufacturing PMI®, seen at 55.2%, up from August and above the 50% needed for expansion. Solid S&P Global manufacturing data last week sparked inflation fears. Fresh data before the open included a surprise drop in the Challenger job cuts report to approximately 43,000 in September, down 20% from a year ago and more evidence of economic vigor.
Three things to watch
- Jobs data, Fed speakers at podium: Digging into estimates for tomorrow's nonfarm payrolls, unemployment is seen steady at 4.1% with wages up 0.3% month over month, according to Briefing.com consensus. Higher-than-expected wage growth would be good news for workers but might rekindle inflation worries that cooled after yesterday's lighter-than-expected August Personal Consumption Expenditures (PCE) price index. Rate hike odds for October—which fell massively this week on PCE, dovish Fed talk, and soft data—likely hinge on the jobs report and September inflation data. On the Fed front today, investors brace for remarks from a host of policymakers. Minneapolis Fed President Neel Kashkari got the ball rolling, saying prices remain elevated and the PCE data didn't "change that story for me very much," Barron's reported. Minutes from the Fed's last meeting are due next Wednesday and could provide insight into September's rate hike. Chances of a rate hike later this month are subdued at 37%, according to the CME FedWatch Tool. However, futures trading pegs odds at nearly 90% of at least one hike before year-end, with December now looking more likely.
- AI propels market even as risks mount: When earnings season begins in two weeks, investors might want to closely monitor how companies are improving operations through AI. "Funding for the AI buildout continues to grow, but returns on investment remain uncertain," said Michelle Gibley, director of international equity research and strategy at SCFR. "Demand for compute and power remains strong, supporting the demand and supply of capital to fund it. However, the environment is highly competitive, with the availability of very low cost and capable open-source models from China." Companies may turn to cheaper AI models for more basic work, which would be tough news for Anthropic and OpenAI. Getting AI more cheaply is one step toward monetizing the technology. Many will likely mention AI on their earnings calls—sometimes numerous times—but investors should look for more nutritional benefits. For instance, proof of AI bringing efficiency that improved margin. Solid examples, not just passing references, could help investors separate AI winners from also-rans.
- Chart and sentiment checks: Technical trends look bullish for the market-capitalization-weighted S&P 500 Index and Nasdaq Composite, but bearish for the S&P 500 Equal Weight Index (SPXEW) and Russell 2000® (RUT), which fell within range of its 200-day moving average. Also, market breadth has almost completely collapsed over the last six to seven weeks, leaving less than 50% of S&P 500 stocks above their 200-day moving averages versus 75% in mid-August. Potential disruptions to a bull thesis include chances of the data center buildout being stalled by politics or more severe rogue AI incidents, as well as questions on how long the Iran conflict might persist, how high oil prices go and for how long, and how high Treasury yields go. "There doesn't appear to be a lot of buyers stepping up to plate for Treasuries even at these elevated levels," my colleague Peterson noted. Treasury auctions scheduled next week, including a 10-year note auction next Wednesday, could provide insight into demand for U.S. debt. Solid auction demand might ease yields, but there's no guarantee.
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On the move
- Micron fell 1% early despite earnings and guidance topping consensus. Investors appear concerned about heavy capital spending and a slight expected decline in gross margin. Revenue grew 379.1% annually, compared with the 351% consensus. Micron said demand has strengthened and it expects tighter chip supplies ahead.
- AI infrastructure and chip stocks mostly rose early on coattails from Micron's solid results. Early gainers included rival memory chip makers like Sandisk (SNDK) and SK Hynix (SKHY), as well as CoreWeave (CRWV), Arm Holdings (ARM), and Applied Materials (AMAT).
- IBM (IBM) popped 5% in early trading after introducing an AI tool called Bob that allows enterprises to deploy AI software development and modernization capabilities within their own premises without moving code, data, or workflows outside their infrastructure.
- Accenture (ACN) soared 19% ahead of the open after earnings beat analysts' estimates and the consulting firm delivered a positive outlook.
- RocketLab (RKLB) climbed about 5% on news it signed a multi-year launch agreement with Tokyo-based Synspective, CNBC said.
- Synopsys (SNPS) was up 3% in early trading after the electronic design automation firm impressed investors with long-term earnings estimates.
- McCormick & Co. (MKC) rose almost 5% early after a strong earnings report.
- Alphabet (GOOGL) was up nearly 2% early after rolling out its newest AI model, called Gemini 4 Argon.
- Constellation Energy (CEG) climbed 3.5% in early trading after agreeing to a $3 billion deal with Amazon (AMZN) to expand a nuclear plant in Maryland, Barron's reported.
- Nike (NKE) fell slightly early today and approaches this afternoon's earnings reports with shares at nearly 12-year lows. Sales in China and Taiwan are down 30% from five years ago due partly to lower-cost high-tech shoes made by domestic firms, The Wall Street Journal reports.
- Vicor (VICR) surged 12% after the power module maker raised its third quarter outlook.
- Jabil (JBL) plunged 10% Wednesday despite sharing a strong AI demand outlook and topping earnings expectations, Barron's reported.
- Conagra (CAG) fell nearly 5% Wednesday despite earnings topping analysts' expectations. Sales volumes dropped.
- The U.S. Dollar Index ($DXY) keeps setting new 2026 highs on rate hike expectations, and now approaches 102, a level it hasn't traded above since early 2025.
More insights from Schwab
Negative earnings can be a trouble sign, but not always: When a company reports earnings in the red, it means investors need to open the hood and check what's wrong. Sometimes it can be a major problem with long-term implications, but that's not a given. Learn more about how to recognize the danger signs in Schwab's new earnings article.
Chainlink and Avalanche debated: Schwab's latest look at cryptocurrency examines key debates and considerations around Chainlink and Avalanche along with their native tokens.
Teach your children: Many Americans suffer because of financial illiteracy that spans across income levels and age. The lack of money knowledge can open the door to costly financial mistakes like credit card interest, late fees or overdraft fees, or worse. Schwab's new financial planning article discusses the importance of offering kids early money lessons.
Chart of the day
Data source: CME Group. Chart source: thinkorswim® platform.
Past performance is no guarantee of future results.
For illustrative purposes only.
Bitcoin (BTC/USD—pink line) broke above $85,500 before paring its gains on Wednesday after a cooler-than-expected PCE report. The 10-year Treasury yield (TNX:CGI—candlestick) experienced similarly volatile trading, falling after the PCE report then resuming its climb to end the day near its highest level since 2007.
The week ahead
October 2: September nonfarm payrolls, September unemployment, and August factory orders.
October 5: September ISM Services PMI®.
October 6: Expected earnings from RPM International (RPM) and Constellation Brands (STZ).
October 7: Expected earnings from Levi Strauss (LEVI) and Applied Digital (APLD).
October 8: Expected earnings from PepsiCo (PEP).
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