News vs. Noise: Rising Treasury Yields, Slower Hiring and $100 Oil

Hiring Slowed Sharply in September, Cooling the Case for Another Fed Rate Hike

The U.S. economy added just 29,000 jobs in September, well below the roughly 84,000 economists expected, and the unemployment rate rose to 4.2% from 4.1%, the Bureau of Labor Statistics reported on Friday, October 2 [9]. August’s gain was also revised down, to 133,000 [10]. Part of the rise in the unemployment rate came from more people entering the labor force, meaning people working or actively looking for work, rather than from a jump in layoffs [9]. The rise was not evenly shared: the unemployment rate for Black workers jumped to 7.0% from 6.0% in August, a full percentage point, compared with a 0.1-point rise nationally [11].

The report lands at a sensitive moment. The Federal Reserve raised its benchmark rate in September for the first time since 2023 and signaled another increase this year [12]. A weaker job market undercuts the case for moving again at the October meeting. After the report, the 10-year Treasury yield fell to about 5.18% from its multiyear highs [10], and stocks opened higher as traders scaled back bets on an October hike [13].

One month of payroll data is noisy. Job growth has averaged about 80,000 a month in 2026 but has swung from a loss of 156,000 in February to a gain of 214,000 in March [14], and Fed officials watch the unemployment rate more closely than the headline payroll count [9]. What we’re watching is whether the next reports confirm a cooling labor market, and whether the Fed holds rates steady in October.

Oil Tops $100 Again as Iran Peace Talks Stall, and Record Diesel Prices Raise Inflation Pressure

Oil prices jumped at the start of the week after President Trump rejected an Iranian proposal to end the conflict and reopen the Strait of Hormuz. Brent crude, the international oil benchmark, rose above $107 a barrel on Monday, September 28 [15]. It has spent most of September above $100 [16]. The Strait matters because roughly a fifth of the world’s oil supply passes through it in peacetime [17].

The pressure is sharpest in diesel, the fuel that moves trucks, farm equipment, and freight. The national average hit a record $6.53 a gallon in September, and President Trump said his administration is “very seriously” considering a ban on diesel exports [18]. Analysts warn that a ban could lower diesel prices briefly but raise gasoline prices if it forces refiners to cut output [18]. The administration is also pressing European governments to release emergency diesel stockpiles [19].

For investors, energy prices feed directly into inflation, and oil-driven inflation and Middle East tensions were among the reasons the Fed gave for that September rate increase [12]. Oil has also swung sharply on headlines about a possible deal [16], which makes inflation, and therefore interest rates, harder to predict. What we’re watching is whether diesel prices ease and whether talks produce a credible path to reopening the Strait.

Two Land-Rich Real-Asset Stocks Sit at Steep Discounts for Opposite Reasons

Timber real estate investment trusts, companies that own and typically operate income-producing real estate [20] (in this case, timberland), depend on housing and construction demand, and that demand has softened. Housing starts fell 2.6% in August, and building permits, a sign of future construction, fell 2.7% [21]. On September 24, Weyerhaeuser lowered its third-quarter outlook for its wood products business [22] to about $30 million below the second quarter, citing higher fuel costs [23]. Its shares hit a new 52-week low near $20 on Monday, September 28 [24], about 28% below their 52-week high [25]. Rayonier, which completed its combination with PotlatchDeltic in January [26], hit its own 52-week low the week before [27].

Texas Pacific Land shows the opposite case. The company owns roughly 894,000 surface acres in West Texas [28] and collects royalties on oil and gas produced on its land without paying to drill [29]. Its business is doing well: in the second quarter it reported record revenue, net income, and royalty production [30]. Yet its stock closed Monday about 38% below its 52-week high [31]. Much of the run to that high came during a surge earlier this year, when oil prices jumped with the Iran war [32].

The distinction for investors is that a stock at a 52-week low is cheaper than it was, which is not the same as cheaper than it is worth [33]. Sometimes the business has weakened, as timber’s softer demand suggests. Sometimes the business is fine and the price had simply run ahead of it. Telling the two apart, by checking cash flow at ordinary prices rather than boom-time prices [33], is the real work. What we’re watching is whether housing demand recovers and whether TPL’s record production holds as oil prices swing.

NVIDIA’s 800-Volt Shift Could Change Who Captures the Economics of AI Power

Power has to be converted before AI chips can use it, and NVIDIA is changing where that conversion happens. Its newer designs move some conversion outside the computing rack, using 800 volts of direct current to carry power more efficiently for more of the trip before stepping it down near the chips [34]. Direct current is electricity that flows in a single direction, as it does from a battery [35]. According to NVIDIA’s August 11 update, a hybrid power rack that works with existing facilities is targeted for the second half of 2026, and a row-level power center is expected in 2027 [34]. These are rollout plans, not evidence of installations [36].

A design change like this can improve customers’ economics while changing which suppliers earn the money [36]. NVIDIA lists Monolithic Power Systems among the companies collaborating on the initiative [37]. That argues against treating Monolithic as an automatic casualty, though participation is not a sales guarantee [36]. Eaton and Vertiv, which supply power distribution and cooling, also appear in the 800-volt ecosystem [37]. Eaton has added liquid cooling through its Boyd Thermal acquisition [38].

Vicor illustrates a different way to get paid. On September 30, it raised its guidance, the company’s own forecast of future results [39], to more than 30% sequential growth for the third quarter [40]. That followed a September 21 raise from nearly 10% to more than 20% [41]. Vicor attributed the increases to royalties from its first nonexclusive license [40], meaning Vicor can license the same technology to other companies as well [42]. It also said four leading companies had secured licenses to its power technology [41]. Licensing lets Vicor earn from the use of its technology, not only from the modules it makes [36]. The figure is guidance rather than reported revenue, and Vicor has not disclosed customers or royalty rates [41].

Farther upstream, power producers and grid companies depend less on any particular rack design. Constellation Energy completed its Calpine acquisition on January 7, creating a 55-gigawatt fleet that includes nuclear, gas, and other generation [43]. A gigawatt is one billion watts [44]. Upstream companies such as Constellation, Quanta Services, and GE Vernova carry a different risk: a proposed data center pays no one until it is funded, connected, and built [36]. Across all three layers, the question for investors is which companies’ roles become more valuable, not simply which ones are attached to AI spending. What we’re watching is whether the new rack designs reach actual installations, whether Vicor’s guidance shows up in reported results, and whether announced projects turn into signed, profitable work.