One weak jobs report was enough to put the Federal Reserve back at the center of the trade. The Nasdaq 100 closed at a record high Friday after September payroll growth missed expectations, earlier months were revised lower and wage growth slowed. That combination immediately reshaped the market’s view of the policy path—and sent traders back toward large-cap technology and semiconductor leaders.

But this was not a clean, one-directional macro rally. Treasury yields initially fell and the US dollar weakened as expectations for Federal Reserve rate cuts increased, before yields later reversed higher. The message for the fourth quarter is therefore more complicated: softer economic data can support technology valuations, but the bond market is still capable of challenging that narrative before the session is over.

The jobs report changed the policy trade

The market’s first reaction followed a familiar pattern. A weaker-than-expected employment report, downward revisions to earlier payroll figures and slower wage growth reduced pressure on the Federal Reserve to maintain restrictive policy. Traders responded by increasing expectations for rate cuts.

Treasury yields declined initially, while the US dollar weakened. For growth-oriented equities, that was a supportive opening signal. Lower yields can make the future cash flows associated with large technology companies more attractive in relative terms, while a softer dollar can reinforce the broader shift in risk positioning. The Nasdaq 100’s record close showed how quickly policy expectations can move equity benchmarks when the market is already focused on interest rates.

Then came the complication. Treasury yields later reversed higher, preventing the session from being read as a simple victory for the rate-cut camp. The reversal matters because it shows that traders remain sensitive to every move in the bond market. The jobs data may have revived rate-cut expectations, but it did not remove uncertainty around how yields will behave heading into the fourth quarter.

AI-chip leaders kept the spotlight

The equity gains were concentrated in precisely the part of the market that has carried the strongest momentum: artificial-intelligence and semiconductor leaders. NVIDIA ($NVDA) gained 1.34% to close at $233.95, marking a third straight daily gain and a new record high. Advanced Micro Devices ($AMD) rose 2.95% to close at $633.91, also extending its winning streak to three sessions.

Those moves indicate that the day’s rally was not merely a broad reaction to softer economic data. AI-chip momentum remained central to the tape. When the Nasdaq 100 reaches a record while $NVDA and $AMD both post a third consecutive daily gain, traders have to separate two forces: macro positioning around the Federal Reserve and continued enthusiasm for the sector’s leading names.

The distinction is important. A macro-driven advance would depend heavily on expectations for lower rates and a sustained decline in Treasury yields. A narrower AI-and-semiconductor advance could continue to rely more on leadership within those groups, even if bond yields remain volatile. Friday’s reversal in yields suggests the second explanation cannot be dismissed.

QQQ confirms the index strength—but not the whole story

The Invesco QQQ ETF gained 1.02% to $749.58 and was upgraded to a “Strong Buy Candidate” after the session. That performance confirms that the record close in the Nasdaq 100 was reflected in a widely followed large-cap technology vehicle, rather than being limited to a single stock.

Still, the ETF’s gain was smaller than AMD’s advance and did not match NVIDIA’s percentage move. That comparison reinforces the concentration question. The broader technology complex participated, but the sharper action remained visible in AI-chip leadership.

For traders, the takeaway is straightforward: the soft September jobs report revived rate-cut expectations and initially pressured yields and the dollar, helping push the Nasdaq 100 to a record. Yet the later rise in yields leaves the macro backdrop unsettled. As the fourth quarter begins, the market may be balancing a potentially friendlier Fed policy outlook against a rally still heavily influenced by AI and semiconductor momentum. The session’s market wrap captures that tension between the initial rate-cut response and the subsequent Treasury-yield reversal.