Traders put a 76% chance on a Fed pause before the jobs report

Traders raised the odds that the Federal Reserve skips another rate increase this month. In September the Fed lifted its target range by 0.25 percentage point, to 3.75% to 4%, and until this week a follow-up hike in October was the likely bet in the futures market.

The futures market has swung the other way. CME Group's FedWatch reading of fed-funds futures, the contracts used to bet on the policy rate, puts a 76% chance on no change at the October 27-28 meeting, up from about 29% a week earlier.

The shift began Tuesday, when New York Fed President John Williams spoke in Buffalo.

"With the policy action we took at our September meeting, there is no need for urgency," he said.

On Monday, traders had put about a 70% chance on an October hike. After he spoke, those odds fell to about even, and they have fallen further since. He also said one more increase may be appropriate late this year, if the economy matches his forecast.

Vice Chair Philip Jefferson, speaking Thursday at the University of Virginia, said yields had risen further since the September meeting, a sign that investors were reassessing the economy. He said he and his colleagues may need more time to reach their own judgment.

On Thursday the two-year Treasury yield fell 10 basis points, to 4.78%, and the 10-year fell 5 basis points, to 5.24%. Over the week, long bonds have not followed. The long-term Treasury fund BTLT, which holds long-dated U.S. government bonds, is down 2.2% over the past five sessions, while traders went from pricing an October hike to pricing a pause.

In premarket trading, the S&P 500 fund ASPY was up 0.5%, and the Nasdaq-100 fund AQQQ was up 0.7%. U.S. stocks were set to open higher.

Oil falls as Europe discusses a reserve release

WTI crude was at $89.39 in early trading, down 3.7% from Thursday. Brent crude was at $99.89, down 2.4%, and back under $100.

Oil fell after European governments took up a French proposal for Europe to release 50 million barrels of diesel and for International Energy Agency members to release 50 million barrels of crude. The talks follow U.S. pressure to cool fuel prices. No release has been agreed.

Fuel supply has been hit by the war in Iran, by a Russian ban on diesel exports that runs through the end of October, and by Chinese refiners suspending October exports.

The oil fund BUSO, which holds oil futures, was down 4.0% in premarket trading. It had gained 3% on Thursday.

Energy shares fell less than oil itself. The energy-stock fund AXLE was down 0.8% in premarket trading after rising 2% on Thursday.

Nike shares fall on weak guidance

Nike shares were down 10.5% in premarket trading. The company guided fiscal 2027 revenue to a high single-digit decline, the upper part of a single-digit drop, and adjusted earnings to $1.15 to $1.35 a share. That adjusted range leaves out about $0.15 a share of costs from Pace, an operating-model overhaul announced with the results.

Fiscal first-quarter revenue was $11.2 billion, down 4%, and reported diluted earnings were $0.48 a share.

The jobs report can still move the October odds

The September jobs report is due at 8:30 a.m. Eastern. A Reuters survey of economists expects 90,000 new jobs, a slowdown from the 162,000 added in August, and an unemployment rate that holds at 4.1% for a third straight month.

A gain closer to August's pace than to that forecast is what would move the odds of an October pause.