No hiring. No firing. No switching jobs. No higher salaries.

"The labor market is 'bed rotting' right now," Ed Al-Hussainy, rates strategist with Columbia Threadneedle Investments, tells Axios, referring to the viral term for staying in bed all day doing nothing.

Why it matters: The longer the labor market naps, the harder it will be to wake up, which could cause problems for the economy and for the stock market.

What they're saying: The labor market's muscles are starting to "atrophy," Al-Hussainy says, noting it can only stay in bed doing nothing for so long "before you have either bigger issues, or you get out of bed and you go for a walk."

• "It's not clear which way things are going to break," he says.

State of play: In lieu of federal jobs data during the shutdown, private data is the star of the show. The latest ADP report indicated jobs were shed from the economy in both August and September, while economists had expected jobs would be added, albeit at a slowing pace.

• In the latest Federal Reserve meeting minutes, members "emphasized rising downside risks — including from lower immigration, demographic trends and the potential labor-displacing effects of AI adoption," writes Gregory Daco, chief economist at EY-Parthenon.

The intrigue: Can't the Fed just cut rates to jumpstart hiring?

• That can be tricky, especially when coupled with sticky inflation. If the Fed were to drop rates significantly to kick up hiring, that leaves policymakers little room to trim if a bigger economic zombie appears: a recession.

Zoom out: These labor market problems "metastasize" and "continue to get worse, until they reach a tipping point where consumption starts to degrade, and then you have another recession scare," Al-Hussainy says.

• It took more than a decade for the labor market to recover from the global financial crisis, for example. Even in the recovery, many were left in jobs they were overqualified for, which created a "decade of lost productivity."
• "A lot of those elements are in the air today," he says.

Yes, but: A recession is not his base case and is not the consensus on Wall Street. Indeed, several strategists tell Axios they see the economy growing from here.

• For investors concerned about the macro outlook, this is a good time to diversify and look for exposure to undervalued pockets of the market, including international equities, says Kristina Hooper, chief market strategist at Man Group, who sees the economy entering a "rolling recession."

What we're watching: Whether low hiring turns into layoffs. Historically, this starts in small businesses, then works its way up to larger companies.

The bottom line: As San Francisco president Mary Daly recently told Axios, "consumer spending is built on the strength of the labor market."

• That strength may require an alarm nudging the job market to wake up.

Chinese tech stocks have ripped higher from their April lows, surging over 44% year-to-date, more than double the Magnificent 7 over the same period.

Why it matters: China's tech sector is positioned for more gains given Beijing's efforts to buoy its economy and compete in the AI race, market strategists tell Axios.

What they're saying: "China has a much better hand than people give it credit for," says Jay Pelosky, founder of TPW Advisory, adding, "they're winning."

Zoom in: Pelosky's bull case for China centers around several tailwinds that he says hold "tremendous capacity for another leg up" for Chinese tech.

• Going solo: Beijing is discouraging the purchase of Nvidia chips amid a broader push to "support and home grow its technology in the AI space," Marta Norton, chief investment strategist at Empower, tells Axios.
• AI IRL: As artificial intelligence starts to merge with the physical world, China understands "much better than we do the tie-in from renewables to robotics to advanced manufacturing," Pelosky says.
• Reflation: The Chinese economy is set to reaccelerate as the government works to fight deflation.
• Catching up: Foreign institutional ownership of Chinese tech is still low.

Zoom out: Chinese valuations are also attractive. The KraneShares CSI China internet ETF (KWEB) is trading under $42. Its all-time high is $102.

• "You have a lot of corollary companies in China tech vis-à-vis U.S. tech, but they're all a lot cheaper," Norton points out.

Driving the news: China unveiled new restrictions on rare earth exports yesterday, seen as a move to gain leverage ahead of planned talks between President Trump and Chinese President Xi Jinping later this month.

• This points to China's upper hand in trade negotiations, Pelosky says, but it also presents a potential risk for investors if talks turn contentious.
• "There's going to be a kind of a rapprochement between the U.S. and China, because we do need their rare earths, and I think they probably would still like to have our Nvidia chips," Pelosky says.

Yes, but: The market consensus remains that the best way to play the AI rally is through U.S. tech stocks. "The U.S. remains the leader on most measures of AI capability," Steve Englander, head of research at Standard Chartered, writes.

• U.S. investment into AI is nearly quadruple that of China's, he notes.
• And "many Americans don't like playing China because of concerns about the rule of law and the sense that China has become more of an adversary of ours," Michael Sonnenfeldt, founder of Tiger 21, a network of wealthy investors, tells Axios.

What we're watching: Any thawing in U.S.-China relations could boost market plays on Beijing's tech expansion efforts.

This Sunday marks the three-year anniversary of the bull market. The S&P 500 is up over 88%, while the Magnificent 7, whose ETF tracks back to April 2023, is up over 166%.

Why it matters: Big Tech stocks have driven this bull market, and that dynamic is not expected to change any time soon.

Hope you celebrate the bull market's anniversary in style this weekend!