Key Highlights

  • Terex climbed on Friday, grouped with Regal Rexnord, Resideo Technologies, Comfort Systems USA and WESCO International among industrial stocks trading higher after the jobs report, with no company-specific news found.
  • Terex builds aerial work platforms under its Genie Brand along with materials processing equipment; many of its biggest customers are equipment rental companies that finance large fleets with debt, making the stock unusually rate-sensitive.
  • The jobs report showed Manufacturing added 9,000 jobs, including 5,000 in machinery, and construction added 11,000, modest bright spots within an otherwise weak headline number.
  • Heavy equipment stocks broadly firmed, with Dow component Caterpillar, cutting-tool maker Kennametal and equipment-rental giant United Rentals all among the gainers alongside Terex.

Terex rose with other equipment makers as a soft September jobs report cut the odds of another Federal Reserve hike. Shares climbed on Friday as investors bought into machinery stocks, betting that a sharp slowdown in hiring will keep the Federal Reserve from raising interest rates again this month. NYSE:TEX, an S&P MidCap 400 member, was one of several industrial stocks that traded higher after the jobs report, alongside Regal Rexnord, Resideo Technologies, Comfort Systems USA and WESCO International. No company-specific news was found for Terex; the stock moved with its peers.

Who Buys Terex Machines

Terex builds aerial work platforms under its Genie brand, the scissor lifts and boom lifts you see on construction sites and in warehouses, along with materials processing equipment such as crushers and screens used in quarrying and recycling.

Many of its biggest customers are equipment rental companies, which buy large fleets of machines and finance them with debt. That makes the Business unusually sensitive to borrowing costs. When rates rise, rental firms tend to slow their fleet purchases; when rate pressure eases, investors start to anticipate a pickup in orders.

The Payrolls Surprise

The Bureau of Labor Statistics reported that employers added just 29,000 jobs in September, far below the roughly 84,000 economists expected. It also cut 60,000 jobs from its earlier estimates for July and August. Average hourly Earnings rose to $37.81, but the annual gain was the slowest since May 2021.

That combination of weak hiring and cooling wage growth gave traders room to dial back bets on another hike. The Fed raised rates on September 16 for the first time since 2023 after the oil shock from the US-Israel war with Iran pushed Inflation higher. After Friday's report, the odds of a second hike at the October 27-28 meeting collapsed to roughly one in five, from about two in three earlier in the week.

Inside the report, there was a small bright spot for machinery makers. Manufacturing added 9,000 jobs, including 5,000 in machinery, and construction added 11,000.

Peers on the Move

Heavy equipment stocks broadly firmed. Caterpillar, the biggest name in the sector and a Dow component, rose on the day. Kennametal, a maker of cutting tools, and United Rentals, one of the largest equipment rental companies and a major buyer of the kind of machines Terex makes, were also among the gainers.

Industrials finished as the third-best S&P 500 sector, behind consumer discretionary and information technology. The S&P 500 rose 56.27 points to 7,722.72, and the Dow Jones Industrial Average gained 250.40 points to 51,176.96, though both indexes still ended the week lower.

Bond Market Spoils Part of the Party

The rate relief came with a twist. Treasury yields fell immediately after the jobs data, then reversed to close higher. The 10-year yield finished near its highest level since 2002. For Capital equipment buyers who borrow long-term, that matters as much as what the Fed does with short-term rates.

Not everyone is convinced the Fed is done. Fed Vice Chair Philip Jefferson said on October 1 that yields across the term structure have increased further, a sign that investors are reassessing the evolving macroeconomic landscape. Fifth Third's Bill Adams said the Fed's next decision in late October is live.

Rental Customer Orders Are the Key Signal to Watch

Terex's next Quarterly Report will show whether rental customers are placing orders again or still holding back. Before then, watch long-term Treasury yields, which will shape financing costs for equipment buyers, and the Fed's October 27-28 decision. Earnings from large banks on October 13 and 14 could also offer a read on how businesses are borrowing for big purchases.