October NFP: the jobs data lands the day after the Nasdaq crash
Hi trader,
yesterday the Nasdaq lost 5.5%.
It’s the worst day since April 2025, according to CNBC.
And today, at 8:30 New York time (13:30 GMT), the macro data that moves US markets more than any other comes out: the October employment report, the one everyone calls the NFP.
It doesn’t happen often that the most awaited data of the month lands on a market that has just stepped out of the ring with a black eye.
And that is exactly what makes today interesting.
What happened yesterday, in short
On Wednesday the market had welcomed the result of the midterm elections, the ones that handed the House and the Senate to the Democrats (I wrote about it here).
On Thursday it took it all back, and then some.
| Index | Thursday 5 November |
|---|---|
| Nasdaq Composite | about -5.5% |
| S&P 500 | about -4.4% |
| Dow Jones | about -3.4%, more than 1,800 points |
The heart of the selling was semiconductors.
Nvidia and Qualcomm lost more than 9%, AMD and Micron double digits.
The reasons, lined up by CNBC and Fortune, are three, and they added up.
Qualcomm’s disappointing guidance for the current quarter.
The doubt, going around for weeks, about how much the billions spent on data centers for artificial intelligence will really pay back.
And the vote: a Democratic Congress raises fears of more rules on AI, and in the local referendums on data centers voters said no in 40 cases out of 41, according to CNBC’s analysis of Ballotpedia data.
The result is that today’s NFP is not being read by a calm market.
It’s being read by a nervous market, one that has just found out how fragile it is.
What the market expects
The numbers, first of all.
| What | September | Expected for October |
|---|---|---|
| New jobs (NFP) | +29,000 | +65,000 |
| Unemployment rate | 4.2% | 4.2% |
| Hourly earnings, month on month | +0.1% | +0.3% |
| Hourly earnings, year on year | +3.0% | +2.9% |
The consensus is the Bloomberg median, and the Reuters poll says more or less the same (other polls sit between 59,000 and 60,000).
The estimates in the Reuters poll range from 35,000 to 125,000: some, like Pantheon and MUFG, expect a number closer to 100,000.
To understand why 65,000 looks like a lot, just look at the last three months.
July was revised to -10,000, August to +133,000, September +29,000.
The average is about 51,000 jobs a month.
It’s a labour market that doesn’t fire, but hires with an eyedropper.
And on September wages there was a detail that stuck in my head: +3.0% year on year, the slowest pace since May 2021.
The clues from this week
The other data released in recent days all point in the same direction: a touch better than September.
ADP, private employment calculated by the company of the same name, said +86,000 on Wednesday, against 69,000 expected.
ISM services put its employment component at 51.4, from 50.1. Above 50 means the companies hiring outnumber those cutting, for the second month in a row.
September job openings (the JOLTS) rose to 7.5 million, with 1.06 vacancies for every unemployed person.
Careful though, because ADP and NFP are distant relatives.
They often agree, sometimes they contradict each other by 100,000 jobs.
Using ADP to guess the NFP is like checking yesterday’s weather to decide on today’s umbrella: it gives you an idea, not a guarantee.
Why this NFP weighs more than usual
Because of the Fed.
On 28 October the Fed kept rates on hold at 3.75-4.00%.
But it did so with two dissents, and both asked for a hike: Lisa Cook and Beth Hammack.
In the statement, economic growth went from “solid” to “strong”.
After that meeting rate futures gave a December hike (the meeting is on the 8th and 9th) more than an 80% probability, which fell to around two thirds after yesterday’s crash.
Translated: this is a Fed looking for a reason to hike again, not to cut.
And the labour market is the reason it’s missing, because so far it has created few jobs.
If today the labour market shows signs of recovery, the December hike becomes almost a formality.
Three scenarios, and how I read them
A number close to consensus, between 50,000 and 100,000, unemployment at 4.2%.
It’s the cleanest scenario.
Nobody has to change their mind about the Fed, and the market can go back to looking at what made it fall yesterday, that is tech.
In this case the NFP passes, and the day is decided by the Nasdaq.
A strong number, above 100,000 and even more so above 125,000, maybe with wages above the expected +0.3%, so +0.4% or more.
This is where the interesting fork opens.
In a normal market strong labour data is good news.
In this market it risks being read as “the Fed hikes in December, and maybe after that too”.
Yields up, dollar up, and more pressure right on tech stocks, which live on low rates.
MUFG, which already expects 90,000, writes that to make Treasuries sell off in a lasting way, and not just for a few hours, it would take a number around 200,000 with unemployment falling.
Below that threshold, the flare-up in yields risks being short-lived: one more reason not to chase the first few minutes.
A weak number, below 50,000, even worse if negative, with unemployment rising.
The first reflex is predictable: yields down, dollar down, the December hike moves further away.
But the day after a -5.5% on the Nasdaq, bad labour data can ignite another fear, recession.
And then the news that’s “good for rates” becomes bad for stocks.
It’s the case where the first move and the real one risk going in opposite directions.
The lesson of the day
I’ll tell you how I see it.
The same number doesn’t say the same thing on two different days.
A +150,000 a month ago would have been a breath of fresh air.
Today, with a Fed split towards hiking and a market already on the floor, it can be read, at least in the heat of the moment, as a threat.
It’s like an overtake on a race track.
The same move, at the same corner, works or ends up in the gravel depending on the tyres you have and how wet the tarmac is.
The number is the move.
The context is the tarmac.
That’s why, at 8:30, I don’t just look at the jobs figure.
I watch how the 10-year reacts in the first few minutes, and above all whether the Nasdaq future’s reaction goes in the same direction as the 10-year or not.
If yields rise and the Nasdaq falls, the market is reading “tougher Fed”.
If both fall, it’s reading “weaker economy”.
Those are two completely different days, and the headline number won’t tell you which one.
How I handle it
The rules are the same as for any big data release, only today they count double.
No positions open on the data.
Guessing the NFP is not a setup, it’s a bet with a widened spread.
The map is drawn beforehand.
Yesterday’s low on the Nasdaq future, the overnight levels, and the options walls.
After a day like yesterday market makers hedge aggressively, and gamma exposure tells you where price tends to slow down and where it risks accelerating.
I look at it on the Thunder Desk, for free, together with the macro calendar.
Size gets cut.
With yesterday’s volatility and a data release at 8:30, the stop can slip by quite a few points.
How much the worst scenario really costs me, I work out this morning, not at 8:29.
The first few minutes are not chased.
The first candle after the NFP is often noise: algorithms reading the headline, wide spreads, a thin book.
The move that matters usually shows up when the New York cash session opens, at 9:30 New York time (14:30 GMT).
And everything goes in the diary.
What I expected, what came out, how the 10-year reacted, how the Nasdaq reacted.
The next time a big data release lands on a nervous market, you’ll have a case of your own to reread.
Three points to take home
- Today at 8:30 New York time (13:30 GMT) the October NFP comes out. Expected +65,000 jobs, unemployment at 4.2%. This week’s ADP, ISM services and job openings point to a touch better than September.
- This data weighs more than usual. The Fed has just kept rates on hold with two votes to hike, and the market is pricing a December hike. A recovering labour market is the last piece it’s missing.
- Context matters as much as the number. The day after the Nasdaq’s -5.5%, a strong number can scare on rates and a weak one on recession. I watch how the 10-year and the Nasdaq move together, not the figure.
The same number doesn’t say the same thing on two different days. The number is the move, the context is the tarmac.
I’ll close with something I repeat to myself every NFP Friday.
The data comes out for everyone at the same time.
Whoever prepared beforehand only has to watch at 8:30.
Suerte Amigo!
Tiziano Brunno
Tradingblog
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