Daily Markets Update: Bond Rout Hits 24-Year High, TSX Slips a 4th Day — and It's Jobs Day

 

Friday, October 2, 2026. Figures are as of early morning, before the 8:30 a.m. ET U.S. jobs report.

Global bond markets set the tone again. The U.S. 10-year Treasury yield touched 5.34% on Thursday, its highest since 2002, before easing back to about 5.24% by the close. Wall Street held up, but the damage was sharper elsewhere: the UK’s 30-year gilt yield crossed 6% for the first time since 1998, and Toronto slipped for a fourth straight session.

Oil jumped more than 4% on Thursday before sliding back under US$100 this morning, and the Canadian dollar fell to a 12-week low. All eyes now turn to today’s U.S. jobs report, which could decide whether the bond selloff cools or keeps running.

Today’s big event: the U.S. jobs report

The U.S. September jobs report lands at 8:30 a.m. ET. Economists expect roughly 84,000 to 90,000 new jobs, with unemployment holding at 4.1% and wages up 0.3% on the month. That would be a big cooldown from August’s surprise gain of 162,000.

It matters because the Federal Reserve raised rates in September for the first time in three years. After Wednesday’s softer-than-expected inflation reading, markets put the odds of another hike on Oct. 28 below 40%, with futures showing about a 72% chance of a hold. A hot jobs number would push those odds, and bond yields, back up. A soft one would do the reverse.

The bond rout, by the numbers

Bond	Level	What happened
U.S. 10-year Treasury	5.24% at the close	Touched 5.34% intraday, the highest since 2002
Canada 10-year	About 4.0%	Near its highest level since 2023
UK 30-year gilt	About 5.97% at the close	Briefly topped 6%, a first since 1998
France 10-year	4.94%	Highest since 2002 ahead of the 2027 budget
Germany 10-year	About 3.65% (this week’s peak)	Highest since June 2009

Higher oil keeps inflation worries alive, and inflation worries keep central banks from backing off. That is the loop investors are trying to price right now.

Canada: TSX falls for a fourth straight day

Index	Close	Change
S&P/TSX Composite	35,154.76	−81.11 (−0.23%)

The TSX has now dropped four sessions in a row and is down about 1.8% on the week. Technology and energy stocks gained, while the big banks all finished lower as bond yields climbed. Decliners outnumbered advancers by roughly six to five.

The September pullback ended a five-month winning streak for the index, though the third quarter still marked its ninth straight quarterly gain, the longest run on record.

The economic data is soft. Canada’s GDP was flat in July, and Statistics Canada’s early estimate points to a 0.2% gain in August. Manufacturing activity (the S&P Global PMI) eased to 51.5 in September from 53.0, its slowest growth in six months. Swaps still price roughly even odds, about 50% to 54%, that the Bank of Canada raises its 2.25% policy rate on Oct. 28.

U.S. markets: a modest bounce as yields eased

Index	Close (Thu)	Change
S&P 500	7,666.45	+14.91 (+0.19%)
Dow Jones	50,926.56	+20.51 (+0.04%)
Nasdaq Composite	26,871.60	+10.53 (+0.04%)
Russell 2000	2,806.63	+9.76 (+0.35%)

The S&P 500 snapped a three-day losing streak as Treasury yields pulled back from their highs, and small caps led. September was still choppy: the S&P 500 slipped about 0.5% for the month but gained roughly 2% for the quarter. A pair of manufacturing surveys showed activity expanding in September, but so did prices, another reminder that inflation pressure is not fading quickly.

Futures were pointing higher early Friday, up roughly 0.3% to 0.5% for the S&P 500, ahead of the jobs report.

Europe: banks lead a sharp selloff

Index	Close (Thu)	Change
STOXX Europe 600	626.65	−1.3%
FTSE 100 (UK)	10,428.27	−1.68%
DAX (Germany)	24,939.35	−1.03%
CAC 40 (France)	7,835.31	−1.62%

European stocks fell to their lowest levels since June. The FTSE 100 had its worst day since May, with UK banks down about 4% as gilt yields surged, and the CAC 40 hit a six-month low as French borrowing costs jumped before the government unveiled its 2027 budget. One bright spot: Capgemini rose more than 7% after U.S. peer Accenture issued a strong outlook.

European markets bounced early Friday, with the FTSE up about 0.5%, the DAX up 0.8% and the CAC up 0.6%.

Asia: Hong Kong sinks after the holiday break

Index	Friday close	Change
Nikkei 225 (Japan)	68,214.53	−1.08%
Hang Seng (Hong Kong)	About 23,943	−2.7%
S&P/ASX 200 (Australia)	About 8,704	+1.0%
Kospi (South Korea)	About 7,004	+0.5%
Shanghai / CSI 300	Closed	Golden Week holiday

ASX 200 and Kospi are shown at late-session levels.

Hong Kong had its biggest one-day drop since July in its first session back from the National Day holiday, with the Hang Seng sliding to its lowest level since July. Japan gave back some of Thursday’s chip-led rally, when the Nikkei closed at 68,956.72. Australia rebounded after Thursday’s roughly 2% drop to its lowest since June. Mainland China’s markets stay closed until Oct. 8.

Oil, gold and the Canadian dollar

Market	Level	What happened
Brent crude	US$102.31 (Thu settle)	Up 4.4% Thursday; back below US$100 on Friday morning
WTI crude	US$92.87 (Thu settle)	Up 2.7% Thursday; about US$89 to US$90 on Friday morning
Gold (spot)	About US$4,185 (roughly C$5,960)	Down about 6% over the past month as yields and the U.S. dollar rise
USD/CAD	1.4244 (loonie at 70.2¢ US)	12-week low for the loonie; down about 2.9% in a month

Oil rallied Thursday on a report that China suspended some refined-product exports for October delivery, a reported third U.S. aircraft carrier heading to the Middle East, and tanker attacks near the Strait of Hormuz. It reversed lower Friday on reports that the UK and the EU are weighing releases of strategic fuel reserves.

The loonie is getting hit from two sides. U.S. yields have climbed faster than Canadian ones, which widens the gap that pulls money toward the U.S. dollar, and the weak Canadian economic data keeps the Bank of Canada from looking decisively hawkish.

What it means for you

Mortgages and borrowing. Fixed mortgage rates follow bond yields, and Canada’s 10-year is sitting near 4%. Variable rates and HELOCs follow the Bank of Canada, and with roughly even odds of a hike on Oct. 28, a 0.25-point rise in prime would add about $42 a month in interest on a $200,000 HELOC balance.

The weak loonie. At 1.4244, US$100 now costs about C$142.44. That makes U.S. travel, online orders priced in U.S. dollars and cross-border shopping more expensive, though it lifts the Canadian-dollar value of any U.S. investments you hold.

Gas and groceries. Oil is priced in U.S. dollars, so a weak loonie on top of Brent near US$100 keeps pressure on pump prices and transport costs.

Savers and bond holders. Higher yields mean new GICs and bonds pay more, but the price of bonds and bond funds you already own falls when yields rise.

What to watch

When	What
Today, 8:30 a.m. ET	U.S. September jobs report (consensus about 84,000 to 90,000; unemployment 4.1%)
Mon., Oct. 5	U.S. ISM services PMI
Thu., Oct. 8	Mainland China markets reopen after Golden Week
Fri., Oct. 9	Canada’s September Labour Force Survey
Mon., Oct. 12	Thanksgiving: TSX closed
Wed., Oct. 28	Bank of Canada rate decision, with a Fed decision the same day

Market data compiled from exchange closes and reports from Reuters, CNBC, Yahoo Finance, Investing.com, Trading Economics, Sharecast, Statistics Canada and the Associated Press. Figures can be revised. This article is for general information only and is not financial or investment advice.