US Treasury yields rose after a stronger-than-expected jobs report dented expectations of another big interest-rate cut by the Federal Reserve next month.

The two-year rate briefly jumped as much as 17 basis points to 3.87%. US stock futures pushed higher on soft-landing expectations. Bond traders, who had begun trimming their wagers on a big reduction by the Fed even before the data released, are now expecting a quarter-point cut in November. 

Nonfarm payrolls increased 254,000 in September following an upwardly revised 72,000 advance over the the prior two months, according to Bureau of Labor Statistics. The unemployment rate fell to 4.1%.

Lindsay Rosner, head of multi-sector investing at Goldman Sachs Asset Management, is one of the many market watchers expecting the Fed to slow its pace of rate cuts. 

“Today’s data hit a grand slam with payrolls coming in strong, positive revisions, and unemployment falling,” she said. “The economy is heading into the post-season solidly. This is a beat on every aspect and the Fed must be smiling as they got their bats out.”

Here’s what else Wall Street is saying about the jobs report:

Eric Merlis, managing director and co-head of global markets at Citizens:

“It looks like we may be coming in for a soft landing after all. While geopolitical events could still throw a monkey wrench into things, today’s jobs numbers should ease concerns about the labor market. Today’s report should give the Fed more flexibility as it looks to continue lowering rates and it should help counter arguments that the Fed acted too late.”

Joe Gaffoglio, President and CEO at Mutual Of America Capital Management:

“The jobs report for September underscores an economy that is generally strong overall, as unemployment remains relatively low, while inflation moves towards the Federal Reserve’s 2% goal.”

Neil Birrell, chief investment officer at Premier Miton Investors:

“US employment data has been the focal point for bond and equity markets for the last two months and that will continue to be the case as everyone tries to second guess Fed policy. As it stands, a half-point cut must now be off the cards at their next meeting, although we do have one more jobs report before then – guess what we’ll all be looking at!”

Chris Larkin, managing director, trading and investing, E*Trade:

“Based on this data, not only is the jobs market not falling off a cliff, it doesn’t appear to be anywhere near the edge. There’s another jobs report due out before the Fed makes its next interest rate decision in early November, but this level of labor-market strength will make it more likely the Fed goes with a smaller cut.”

Some of the main moves in markets:

Stocks

• S&P 500 futures rose 0.8% as of 9:06 a.m. New York time
• Nasdaq 100 futures rose 1.3%
• Futures on the Dow Jones Industrial Average rose 0.6%
• The Stoxx Europe 600 rose 0.6%
• The MSCI World Index was little changed

Currencies

• The Bloomberg Dollar Spot Index rose 0.4%
• The euro fell 0.5% to $1.0973
• The British pound fell 0.2% to $1.3100
• The Japanese yen fell 1.1% to 148.53 per dollar

Cryptocurrencies

• Bitcoin rose 1.6% to $61,743.41
• Ether rose 2% to $2,389.5

Bonds

• The yield on 10-year Treasuries advanced 10 basis points to 3.94%
• Germany’s 10-year yield advanced eight basis points to 2.22%
• Britain’s 10-year yield advanced 11 basis points to 4.13%

Commodities

• West Texas Intermediate crude rose 0.4% to $74.02 a barrel
• Spot gold fell 0.5% to $2,642.65 an ounce