Key Highlights

  • KLA Corp finished among the top 15 performers in the S&P 500 on Friday and ranked among the Nasdaq-100's top ten gainers, with no company-specific news found for the day.
  • The September jobs report added just 29,000 jobs against roughly 84,000 expected; Wharton economist Mohamed El-Erian said the data would put the Fed definitely on hold for October.
  • Chip-equipment peers moved together: Teradyne topped the entire S&P 500, Lam Research rose, and ASML climbed ahead of its mid-October results, while storage stocks Seagate and Western Digital plunged on a Toshiba capacity report.
  • The S&P 500 and Dow both finished the week lower even after Friday's gains, while the Nasdaq Composite and Nasdaq-100 finished higher, underlining how much of the advance was concentrated in tech.

KLA Corp (NASDAQ:KLAC) makes the inspection and measurement tools chip factories use to spot microscopic defects on silicon wafers. Every advanced chip, from smartphone processors to AI accelerators, passes through its machines on the way to production. On Friday, investors were happy to own that kind of exposure. Shares climbed and finished among the top 15 performers in the S&P 500. It also ranked among the top ten gainers in the Nasdaq-100. No company-specific news was found. KLA moved with semiconductor equipment stocks after the jobs report.

The Payrolls Trigger

The Bureau of Labor Statistics said the US economy added just 29,000 jobs in September, against expectations of about 84,000. Private payrolls rose 46,000, and revisions cut July to a loss of 10,000 and August to a gain of 133,000.

The report came at a sensitive moment. The Federal Reserve, led by Chair Kevin Warsh, raised rates on September 16, its first increase since 2023, after Inflation picked up on the back of the oil shock from the US-Israel war with Iran. Futures markets had seen another hike in October as likely. After the data, those odds collapsed, then partly recovered into the close.

Wharton economist Mohamed El-Erian said the report is going to put the Fed definitely on hold for October.

The Equipment Pack Moved Together

Chip-equipment stocks tend to rise and fall as a group because they share the same customers: the foundries and memory makers deciding how much to spend on new factories.

On Friday the group was firmly higher. Teradyne, which makes chip-testing machines, topped the entire S&P 500. Lam Research rose, and Dutch lithography giant ASML climbed in the Nasdaq-100 ahead of its third-quarter results in mid-October. Kulicke and Soffa, a maker of chip-assembly equipment, also rallied.

Chip designers joined in. Nvidia hit a record high during the session after Morgan Stanley named it its top semiconductor pick, citing a new product cycle. Arm, AMD, Intel and Microchip all posted solid gains.

The Nasdaq-100 closed at a record 30,807.93, up 306.37 points, and the Nasdaq Composite touched an intraday all-time high before closing at 27,190.86. The S&P 500 gained 56.27 points to 7,722.72.

Where the Rally Falls Short

There were warnings beneath the surface. Treasury yields dipped after the report but reversed to close higher, with the 10-year near its highest level since 2002. The 2-year yield also rose.

Breadth was narrow. Most S&P 500 stocks still trade below their 50-day moving averages, and the CNN Fear & Greed index was in Fear at 31. The S&P 500 and Dow both ended the week lower, while the Nasdaq Composite and Nasdaq-100 finished the week higher, underlining how much tech has carried the market.

Inside tech, storage was the sore spot. Seagate and Western Digital plunged after reports said Toshiba plans to double hard-drive capacity.

ASML Results Will Set the Tone

ASML's results in mid-October will be the first big read on chip-equipment orders this Earnings season and could move KLA as well.

The Federal Reserve meets on October 27-28. Fifth Third's Bill Adams said their next decision in late October is live. September inflation data will help decide the outcome. Broader earnings season starts with PepsiCo on October 8, Delta on October 9 and the big banks on October 13 and 14. Analysts expect strong double-digit earnings growth for S&P 500 companies in the third quarter.