10-year Treasury yield rises after much stronger-than-expected October jobs report

U.S. Treasury yields jumped as investors assessed a stronger-than-expected October jobs report, which strengthened the case for another rate hike at next month’s Federal Reserve policy meeting.

The benchmark 10-year Treasury yield climbed more than 3 basis points to 4.868%. The long-dated 30-year Treasury bond rose more than 2 basis points to 5.275%. Meanwhile, the 2-year Treasury note yield jumped nearly 5 basis points to 4.524%.

One basis point equals 0.01%, and yields and prices move in opposite directions.

The October non-farm payrolls report showed the U.S. economy added 165,000 jobs last month, while the unemployment rate dipped to 4.1%, the Bureau of Labor Statistics reported Friday.

That’s far better than the 59,000 jobs economists were anticipating, and for the unemployment rate to hold steady at 4.2%, according to Dow Jones consensus estimates. October also marked a sharp improvement from September’s weak jobs numbers, when just 29,000 jobs were added to the economy.

“Fed officials are likely wishing they hiked rates last week because the latest red hot labor market data are going to make their job to bring down inflation even harder,” wrote Christopher S. Rupkey, chief economist at FWDBONDS. “The economy is heating up with more jobs than markets could even imagine a month ago.”

“One thing is certain and that is interest rates are going higher, much higher,” Rupkey continued.

Markets continued to price in another rate increase this year. Fed funds futures were pricing in a more than 76% chance of a quarter point hike coming at the Dec. 9 meeting, up from more than 66% the day prior, according to the CME FedWatch Tool. Fed funds currently stand at 3.75% to 4.00% following the central bank’s quarter point increase at its September meeting.

The outcome of the U.S. midterm elections dominated markets this week after the Democrats won control of both chambers of Congress. This has sparked some concern among investors about whether that will lead to a potential slowdown in data center construction.

Elsewhere, investors are absorbing the blows from a selloff in artificial intelligence stocks on Thursday, which saw the Nasdaq, S&P 500, and Russell 2000 all log their worst one-day loss since April 2025, according to FactSet data. The “Magnificent Seven” stocks alone lost more than $1 trillion in aggregate market cap during the selloff.

— CNBC’s Jeff Cox and Paulina Likos contributed to this report