Indices are falling while bond yields are rising after strong employment data

• U.S. stocks fell on Monday as investors assessed interest rate moves following Friday’s strong jobs report.

• The yield on ten-year government bonds rose above 4% for the first time since the end of July.

• Investors will focus this week on earnings season and the upcoming September CPI report.

U.S. stocks fell at the start of the week as investors assessed the outlook for interest rates following September’s strong jobs report.

The market is taking a breather after ending last week with its fourth consecutive weekly gain and a new record for the Dow Jones Industrial Average. Investors cheered the stronger-than-expected nonfarm payrolls report, which showed employers added 254,000 jobs last month, crushing estimates of about 150,000.

Ten-year U.S. Treasury yields rose above 4% on Monday for the first time since late July, and investors are now wondering how often the Federal Reserve will cut rates this year with the economy still on solid footing.

“Following Friday’s strong employment report, the consensus could shift to ‘no rush to ease further’ during the fall. We cannot rule out that ‘longer higher’ will make a comeback this winter. We are in the unfinished camp for the rest of this year,” Yardeni Research said in a note on Monday.

The futures market is pricing in two more rate cuts of 25 basis points by the Fed before the end of the year.

Investors will turn their attention to earnings season, which kicks off this week with PepsiCo’s results on Tuesday, followed by the first of the major banks on Friday.

Investors will look for clues about the financial strength of consumers, the ability of companies to monetize AI and the overall impact of lower interest rates.

The September CPI report is also on the economic calendar this week and will be published on Thursday. Economists expect the CPI index to rise 2.3% year-on-year in September, up from 2.5% in August.

Here’s where US indexes stood shortly after the 9:30 a.m. opening bell on Monday:

Here’s what else is going on:

In commodities, bonds and crypto:

• West Texas Intermediate crude rose 1.53% to $75.52 a barrel. Brent crude, the international benchmark, rose 1.35% to $79.10 per barrel.

• Gold fell 0.07% to $2,665.90 an ounce.

• The yield on ten-year government bonds rose by 6 basis points to 4.027%.

• Bitcoin rose 0.45% to $63,102.

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