The U.S. Economy Added 29,000 Jobs in September, Far Fewer Than Expected. Here's Why That's Good News for the Stock Market Right Now.
2026-10-02 14:26
•Bram Berkowitz •The Motley Fool
•••••• • Axe Cap view
Weaker US Jobs Data May Ease Pressure on SA Equities
September's US jobs report signals a pause in Fed rate hikes, offering a breather for rand-linked markets.
The US adding just 29,000 jobs in September, far below estimates, sparked a rally in global equities and a dip in bond yields because investors now see the Fed pausing interest rate hikes. For South Africa, a pause in US rates is crucial. Higher US yields typically attract capital away from emerging markets, pressuring the rand and local stocks. Banks like Standard Bank and FirstRand are sensitive to both domestic rates and currency moves. Softer US data could stabilise the rand, giving a modest boost to these counters. However, local risks like political uncertainty or renewed power issues could still weigh on the market regardless. Also, if inflation in the US flares up unexpectedly, the Fed could reverse course. Still, with the USD/ZAR likely to ease from recent highs, rand hedge stocks like Naspers and Prosus might see less foreign selling pressure. Watch the openness to foreign flows into SA equities as a key indicator. this is just our opinion and not financial advice
Trim positions in local banks to lock in gains after their recent rally but watch for dips to re-enter. Add to Naspers and Prosus on rand stability if the USD/ZAR softens below 19.80. Avoid chasing sectors vulnerable to local risks like retail for now.
- USD/ZAR
- Standard Bank
- Naspers
- US inflation surprises leading to renewed Fed tightening
- South African domestic political uncertainty affecting investor confidence
7/10
The U.S. added only 29,000 jobs in September, well below the expected 84,000, with unemployment rising to 4.2%. Despite weak labor data, stock markets rallied as bond yields declined following the report. The softer jobs data suggests the Fed may hold interest rates steady, providing relief to equity valuations that have been pressured by elevated bond yields throughout 2024.
Our take is based on reporting first published by The Motley Fool.