| Good morning. The yen falls the most in more than two years. Tesla posts its first increase in quarterly vehicle sales this year. The IPO market is picking up. Here's what's moving markets. —Isabelle Lee Treasuries slid and the US dollar climbed after stronger-than-expected jobs numbers dampened Wall Street's confidence that the Federal Reserve's next rate cut would be a big one. Ten-year yields closed in on 3.8% after hitting a low of 3.69% in the prior session amid a flare-up of tensions in the Middle East. The dollar nearly reached a two-week high after the labor readout as traders pondered the scope of the Fed's next move. ADP data Wednesday showed US companies added more jobs than expected last month, at odds with other indicators that show a cooling labor market. Friday's official nonfarm payrolls numbers will be the next critical gut check on workers and the US economy. New Japanese Prime Minister Shigeru Ishiba said the economy isn't ready yet for further rate hikes, in comments that jolted the yen. "I don't think the environment is ready for an additional rate hike," Ishiba said in unusually strong comments on monetary policy for a Japanese prime minister. "I told the governor that my hope is the economy will make progress in a sustainable manner toward the end of deflation with monetary easing trend in place," he said, referring to Bank of Japan Governor Kazuo Ueda. The Japanese currency fell more than 2% to a session low in late New York trading after Ishiba's comment, its biggest drop in more than two years. Mercedes-Benz and BMW are pressing Berlin to vote against imposing significantly higher European Union tariffs on Chinese-made electric vehicles. "The EU should seek a negotiated solution with China instead of imposing tariffs," Mercedes-Benz CEO Ola Källenius said. A 'no' vote from the German government would be a signal and would help avoid a trade conflict, he added. EU member states are preparing to vote Friday on imposing definitive tariffs as high as 45% on imported EVs made in China. It would take a qualified majority to block the tariffs. Tesla posted its first increase in quarterly vehicle sales this year, though the automaker let down investors expecting more of a bump from China boosting electric-car subsidies. The firm handed over 462,890 vehicles to customers in the last three months, up 6.4% from a year ago. Deliveries came up shy of the roughly 463,900 units expected among analysts tracked by Bloomberg. Tesla got a lift during the quarter from China's government doubling an incentive for consumers to trade in older cars for electric models, stoking demand in the world's largest EV market. The market for initial public offerings of companies that are owned by the likes of private equity firms is picking up, buoying the outlook for such first-time share sales heading into next year. That's according to Keith Canton, JPMorgan's head of Americas equity capital markets. At least four such US listings are slated for this month. The burst of business will be welcome news for investors sitting on $3.2 trillion of firms that have been stuck in PE firms' portfolios after a choppy three years for new entrants. Here's what caught our eye over the past 24 hours: - Apollo CEO warns that aggressive Fed cuts risk backfiring
- AI can only do 5% of jobs, says MIT economist who fears crash
- OpenAI raises $6.6 billion in funds at $157 billion value
- Traders bet on $100-a-barrel oil as Middle East risks rise
- Coffee futures fall as EU move puts inventories in focus
- Sydney doesn't have enough three-bedroom apartments for boomers
Wall Street analysts are already fretting that a 6,000 target on the S&P 500 might prove conservative heading into year-end: "I am bullish on US equities for a year-end rally starting on October 28th and I am worried that my 6,000 target is too low," Goldman Sachs' Scott Rubner wrote in a note to clients Wednesday. A lower bar for the upcoming earnings season supports this thinking; however, key to more stock gains will likely be how the labor market evolves. First, a look at the numbers. Analysts have steadily chopped their estimates for S&P 500 profit growth for the upcoming third-quarter earnings season. The latest projection calls for 4.7% growth, which would mark a significant deceleration from the first half of the year. The good news is that this has been a familiar pattern since the S&P 500 escaped its profit recession last year, and again and again, corporate America has managed to easily beat expectations. If we're in for a repeat (and we likely are), 5% upside from current levels to 6,000 doesn't seem that far-fetched. There is one caveat that could stand in the way of further stock gains. This week brought more evidence of a cooling labor market — despite the strong headline beat in job openings data. Deutsche Bank's Jim Reid summed it up nicely: "We know from history that once labor markets turn that trend is difficult to reverse, so we are at a delicate point in the cycle even if the spot US data remains relatively strong." So if the unemployment rate continues to climb, stocks may have a harder time sustaining their upward march. Friday will offer more clues with nonfarm payrolls. Tatiana Darie writes for Bloomberg's Markets Live blog in New York. Follow her on X at @tatianadariee. | 
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