Good morning, it’s Monday, October 5, 2026. The jobs report cracked. The bond market didn't.

Non-farm payrolls rose by just 29,000 in September, well below the 84,000 forecast, and the unemployment rate rose to 4.2%. The S&P 500 rose Friday to sit less than 1% from its record high.

But the 10-year Treasury yield is at 5.28% and Brent crude futures are above $100 per barrel.

That's near the highest 10-year yield since 2002.

The setup: Futures are flat, a $22.6B takeover is lighting up industrial software, and the 10 a.m. services report will tell us whether Friday's relief rally has legs.

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What's moving the market: Oil is lower as rising Middle East exports and a planned G7 release of emergency oil stocks ease supply concerns, and OPEC+ agreed over the weekend to keep November production targets unchanged. Yields, meanwhile, are ticking higher again.

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Most important: The ISM prices-paid component, expected at 73 versus 72.6 prior. A hot reading could undo Friday's drop in rate-hike odds.

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Friday's jobs report should have been a gift to bondholders.

Revisions cut 60,000 jobs from the prior two months, and traders trimmed bets for a Fed rate hike this year. The probability of an October hike dropped to roughly 18 to 20 percent.

The 10-year barely moved. It jumped more than 80 basis points in the third quarter, its largest quarterly increase since 1994, and hit 5.342% on October 1.

A resilient economy, fiscal deficits and worries about oil are keeping long-term yields elevated.

What this means for investors: Soft jobs data helps stocks only if yields follow. Watch the 10-year more closely than the indexes this week, especially around Wednesday's Fed minutes.

Schneider Electric will pay $205 per PTC share, a 42.3% premium to Friday's close, and PTC jumped over 34% in early premarket trading.

It's Schneider's largest deal ever and follows its $3.1 billion purchase of industrial AI firm Cognite in June. The bet: factories will increasingly run on software and AI.

Europe isn't fully sold. Schneider's stock dropped 8.3% in Paris, and the company will fund the deal with up to 6 billion euros of new equity and as much as 17 billion euros of new debt.

Why it matters: PTC had fallen about 34.4% from its all-time high on weak revenue growth. Other beaten-down industrial software names could get a second look.

If ISM prices paid runs hot → hike talk returns; pressure on growth and housing stocks.

If oil keeps easing → relief for consumers and airlines ahead of Delta's Friday earnings; pressure on energy producers.

If the 10-year holds above 5% → savers and income investors keep collecting yields not seen in two decades.

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The opportunity: Intermediate- and long-term Treasuries.

Why now: Before the war with Iran started in late February, the 10-year yield dipped below 4%. It now pays 5.28%.

Bull case: If hiring keeps cooling, yields could fall and bond prices rise. You collect 5%+ while you wait.

Risk: An oil spike or weak auction demand could push yields higher first.

Watch: This week's Treasury auctions, after recent auction demand was far from strong.

Friday's data lowered hike odds. It didn't remove them.

Investors who entered 2026 expecting rate cuts are now debating whether the next move is up.

Watch: Wednesday's FOMC minutes. Any discussion of further tightening could jolt bonds fast.

Big money is getting more defensive on both stocks and bonds.

Equity fund managers cut their S&P 500 net long position by 33,658 contracts, while speculators added 31,070 contracts to their Treasury bond net short, bringing it to 186,875.

Translation: institutions are betting yields stay high, and trimming stock exposure as the S&P nears records.

The 10-year sat at 3.96% at the end of February. It's now 5.28%, a jump of more than 130 basis points. That raises borrowing costs for homebuyers and companies, but also hands income investors their best Treasury yields since 2002.

Stocks are near records, but the bond market holds the key. Soft hiring buys the Fed time; it hasn't brought long-term rates down.

Stay constructive on equities, and let 5%+ Treasury yields do some of the work in your portfolio.

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