Last week delivered the week's setup in three acts. PCE on Wednesday came in cooler than expected, ISM Manufacturing on Thursday held in expansion but slipped, and the September jobs report on Friday printed 29,000 payrolls against a 90,000 consensus. Markets rallied on the jobs miss because traders concluded the Fed has no case for a November hike. The S&P 500 ended the week down 0.3%, the Nasdaq added 0.5%, and the Dow fell 1.3%. This week the story shifts: FOMC minutes Wednesday show what the Fed was actually debating on September 16, and major banks open Q3 2026 earnings season. Here is what to watch.
Market News, Week of October 5, 2026
The September jobs report was the defining event of last week and possibly the most important single data point of the quarter. Nonfarm payrolls rose 29,000, less than one-third of the 90,000 consensus and well below Capital Economics' 50,000 projection. August was revised down to 133,000 and July was revised to a loss of 10,000 jobs, meaning the three-month trend is now dramatically weaker than anyone projected heading into the week. The unemployment rate rose to 4.2% from 4.1%. Average hourly earnings rose $0.05 to $37.81 in September, with wages up 3.0% year-over-year. That wage number is consistent with a labor market that is cooling, not accelerating. The market reaction was a rally: traders immediately priced out any probability of a November FOMC hike, and stocks rose sharply Friday afternoon.
The PCE print on Wednesday September 30 set up the Friday reaction. August PCE came in at 3.4% headline year-over-year (expected 3.7%) and 3.0% core (expected 3.3%), both cooler than forecast. However, the improvement was partly driven by the BEA's annual methodology overhaul affecting software, legal services, and portfolio fee measurements, not purely from prices cooling organically. The Fed will assess the methodology-adjusted number carefully. A core PCE of 3.0% on its face is the Goldilocks scenario from last week's preview: not hot enough to force a November hike, not cool enough to reverse the September hike. The combined PCE plus jobs picture is the "Cool PCE + Weak Jobs = Fed has cover to pause and markets rally" scenario. That is exactly what played out through Friday's close.
ISM Manufacturing for September printed 54.6 on Thursday, slipping from August's 55.6 and missing the 55.2 consensus. The new orders sub-index contracted. A headline above 50 keeps the expansion thesis intact but the new orders contraction is a leading indicator that October manufacturing activity may soften further. Manufacturing is holding expansion for now, but the forward signal weakened.
The week opened badly. Monday September 28 saw the S&P 500 and Nasdaq fall after President Trump rebuffed an Iran peace deal, sending oil prices higher at the open. Markets fell Monday through Wednesday before the PCE relief rally began. The full-week picture: Tech sector +1.8%, Energy +1.3%, Health Care -2.7%. The market that was supposed to be a week of macro clarity turned into a daily reaction machine, with each data point reversing the prior day's positioning until Friday's jobs report closed the week on a definitive read.
Economic Calendar, Week of October 5, 2026
Monday, October 5: ISM Services PMI for September (10:00am ET, impact: High). Services is approximately 77% of the U.S. economy. Manufacturing held expansion at 54.6 last week but new orders contracted. The services read will show whether the broader economy is absorbing the Fed's rate hike or beginning to soften alongside manufacturing. A September services PMI below 50 would be the first signal that rate hikes are reaching the consumer and business spending that drives the majority of U.S. output.
Tuesday, October 6: U.S. International Trade in Goods and Services for August (8:30am ET, impact: Medium). The trade deficit reflects domestic demand for imports and foreign demand for U.S. exports. In a rate-hike environment with a stronger dollar, imports tend to increase while export competitiveness falls. The August trade balance will be the first read on whether dollar strength from the September rate hike is showing up in the trade data.
Wednesday, October 7: FOMC Minutes from the September 15-16 meeting (2:00pm ET, impact: Very High). The minutes are the week's most market-moving release. The vote was announced as unanimous but the minutes will reveal the internal debate: how close was the discussion on the rate path, what conditions officials said would trigger another hike, and whether any members dissented in spirit even if not in vote. After a 29,000 jobs print, the market is pricing no November hike. If the minutes show officials explicitly flagged a weak labor market as a reason to pause, the rally holds. If the minutes show the committee was already leaning toward November as a live meeting before the jobs data, there is a re-pricing event in the 2:00pm window. Consumer Credit for August also releases at 3:00pm ET.
Thursday, October 9: Q3 2026 Bank Earnings. JPMorgan Chase, Wells Fargo, Citigroup, and Goldman Sachs are all expected to report before market open. This is the official start of the Q3 2026 earnings season in earnest. With 13 early S&P 500 reporters already showing 85% beat rates and 31% earnings growth, the bar is set high. The banks will be the first read on net interest income under the higher rate environment, loan loss provision trends as the labor market weakens, and trading revenue given Q3 volatility from the Fed hike and oil spike. JPMorgan is the most important single print of the week.
Friday, October 10: No major scheduled economic data releases. Post-earnings digestion day. Any early Q3 commentary from bank management teams on credit quality and consumer spending will set the tone for the broader earnings season through October.
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