S&P 500 Is Set for Record as Solid Jobs Sink Bonds: Markets Wrap
(Bloomberg) — A much stronger-than-anticipated US jobs report lifted stocks on speculation that economic resilience will keep powering corporate profits. Treasuries fell as traders trimmed bets on Federal Reserve rate cuts this year.
The equity advance pushed the S&P 500 toward its all-time highs, with the gauge rising 0.7%. The yield on 10-year Treasuries climbed four basis points to 4.18%. Money markets priced in the Fed’s next rate cut in July, from June previously. The dollar was little changed.
US payrolls rose in January by the most in more than a year and the unemployment rate unexpectedly fell, suggesting the labor market continued to stabilize.
Employers added 130,000 jobs last month and the unemployment rate slid to 4.3%. That followed revisions to the prior year, which showed a marked slowdown in hiring. Job gains averaged just 15,000 a month last year, down from the initially reported 49,000 pace.
“Markets may have been expecting a downshift in today’s numbers after last week’s soft data, but the jobs market hit the gas pedal instead,” said Ellen Zentner at Morgan Stanley Wealth Management. “Today’s data shows an acceleration in employment that was strong enough to drive unemployment lower.”
This is the kind of report investors should welcome — even if it gives the Fed more room to stay put, said Bret Kenwell at eToro.
“Still, it’s important to keep perspective: this is one data point, and it doesn’t erase the recent softness elsewhere in the data. But if the labor market is indeed stabilizing, that would be constructive for both the economy and the market,” he said.
The bigger implication may be for stocks given that a stronger job market will likely support the “broadening trade,” according to Brad Conger at Hirtle Callaghan.
Ahead of the release of the report, traders were betting on a softer jobs data following the release of several downbeat job market indicators, noted Fawad Razaqzada at Forex.com. As it turned out, it was quite the opposite, he said.
“The better-than-expected job numbers for January are a bright spot in an otherwise uncertain labor market,” said Jerry Tempelman at Mutual of America Capital Management.
If the recent jitters in the stock market are due to concerns of a weakening labor market and/or economy that is headed toward a recession, this report should alleviate those concerns in the short run, according to Chris Zaccarelli at Northlight Asset Management.
“Until we see significant weakness in the labor market, the economy or corporate profits, we believe this is still a market where dips can be bought,” he said.
The jobs report checked all the boxes today with better headline results, stronger participate rates, and the unemployment rate ticking lower, noted Art Hogan at B. Riley Wealth.
“This is unambiguously good news,” he said. “It appears we have moved the Software Armageddon last week to a job’s bonanza this week.”
Investors are shifting from trading headlines to focusing on earnings durability, balance-sheet strength, and selective growth, knowing volatility and rotation are likely as 2026 unfolds, according to Gina Bolvin at Bolvin Wealth Management Group.
“The market got the jobs report it needed,” said Brad Smith at Janus Henderson Investors. “Despite tight spreads and elevated multiples, we view this as a favorable backdrop for risk assets.”
Worst-case scenarios didn’t play out thanks to a private-sector rebound, according to David Russell at TradeStation. Today’s numbers seem to confirm the manufacturing rebound we’ve recently seen
“It’s good news for people worried about an imminent slowdown, but it also reduces the urgency to cut interest rates,” he said.
Looking through the noise, today’s print is a positive for risk assets given it shows a solid labor backdrop that can fuel further upside in consumption, said Jeff Schulze at ClearBridge Investment.
“Today’s print suggests less of a need for additional monetary easing to lift the labor market,” he said. “However, the drag from higher rates is being more than fully offset but the improved growth outlook, and equity futures are up modestly.”
The labor market is showing some tentative signs of re-tightening, although there remains a way to go, according to Kay Haigh, at Goldman Sachs Asset Management.
“The FOMC’s gaze instead will turn to the inflation picture with the economy continuing to perform above expectations,” he said. “We still see room for two more cuts this year; however, an upside surprise in the CPI on Friday could tilt the balance of risks in a hawkish direction.”
Corporate Highlights:
T-Mobile US Inc. reported it added fewer mobile-phone subscribers than analysts expected in the fourth quarter, highlighting the challenge ahead for new Chief Executive Officer Srini Gopalan. Kraft Heinz Co. halted plans to split in two, a surprising reversal weeks after bringing in a new chief executive officer with experience breaking up a food company. Shopify Inc. beat analysts’ fourth-quarter estimates after strong holiday spending lifted revenues at the e-commerce firm. Humana Inc. forecast profit that fell short of Wall Street’s expectations for the year, the latest insurer to disappoint investors as the industry grapples with rising costs and government pressure. Toymaker Mattel Inc. reported holiday results that fell short of analysts’ estimates and issued a 2026 forecast for lower profit. Activist investor Ancora Holdings Group is urging the board of Warner Bros. Discovery Inc. to reject the offer by Netflix Inc. and reconsider a competing bid by Paramount Skydance Corp., adding a new plot twist to one of Hollywood’s biggest takeover battles. Cloudflare Inc. reported quarterly results that showed continued demand for its security and performance services, as enterprises prioritized network resilience and application protection. Ford Motor Co. expects profit to jump in 2026 even after a surprise $900 million tariff bill at the end of last year dented the carmaker’s earnings. Lyft Inc. issued a disappointing forecast that missed Wall Street expectations, a sign that its global expansion and new product offerings are not performing as quickly and as well as anticipated. Nike Inc. expects its wholesale business to pick up steam across the world as it accelerates the launch of new footwear and apparel products and doubles down on its commitment to sports. Chevron Corp., Eni SpA, QatarEnergy and Repsol SA were among major energy companies that won rights to explore for oil and gas in Libya, the latest sign that the nation that holds Africa’s largest crude reserves is opening up for investments following years of civil war. Robinhood Markets Inc. reported lower fourth-quarter profit as sharp declines in Bitcoin and other cryptocurrencies weighed on results at the online brokerage. Gilead Sciences Inc. forecast 2026 product revenue and profit that missed analysts’ expectations, even after it outperformed during last year’s fourth quarter. US regulators refused to review Moderna Inc.’s novel mRNA flu vaccine, dealing a major blow to the company as it seeks more products beyond its Covid shot. Domino’s Pizza Enterprises Ltd. named McDonald’s Corp. veteran Andrew Gregory as its new global chief executive officer, charging him with turning around the chain’s flagging fortunes. Hilton Worldwide Holdings Inc. reported fourth quarter earnings that beat expectations, as the company’s ability to add new hotels to its global network drove growth. The Federal Communications Commission said it hasn’t received a letter from 40 Congressional Republicans opposing the proposed merger of broadcasters Nexstar Media Group Inc. and Tegna Inc. Elliott Investment Management has built a stake in London Stock Exchange Group Plc as the FTSE 100 index owner grapples with disruption from artificial intelligence and a plunge in listings, a person with knowledge of the investment said. Commerzbank AG’s improved outlook for this year failed to sway investors, underscoring the challenges for Chief Executive Officer Bettina Orlopp as she continues to defend the bank against a potential takeover. ABN Amro Bank NV reported fourth-quarter profit that missed analyst expectations on higher-than-expected expenses and provisions for bad loans. Heineken NV will cut about 7% of its workforce to contend with an industry-wide slump in beer demand triggered by rising prices and consumers moderating their alcohol consumption. Bombardier Inc. won a 40-plane order for its Challenger 3500 aircraft from Vista Global Holding Ltd., one of the world’s biggest operators of business jets, amid growing global demand for private aviation. Dassault Systemes SE gave weak guidance, stoking concerns that artificial intelligence will disrupt its business model and turning the stock into one of the biggest targets yet of a fear-driven selloff in businesses viewed as vulnerable to AI. TotalEnergies SE trimmed its share buybacks to the lower end of its guidance range, aiming to keep debt in check as it adjusts to lower oil prices. Samsung Electronics Co. will unveil its latest mainstream Galaxy smartphones on Feb. 25 at an event in San Francisco, hoping to spur upgrades and fresh momentum in its rivalry with Apple Inc.’s iPhone and Android-based competitors. ASX Ltd. said chief executive Helen Lofthouse will leave the role in May, without naming a successor as the Australian exchange grapples with challenges including a regulatory probe. Some of the main moves in markets:
Stocks
The S&P 500 rose 0.7% as of 9:31 a.m. New York time The Nasdaq 100 rose 0.9% The Dow Jones Industrial Average rose 0.6% The Stoxx Europe 600 rose 0.3% The MSCI World Index rose 0.6% Currencies
The Bloomberg Dollar Spot Index was little changed The euro fell 0.3% to $1.1863 The British pound was little changed at $1.3650 The Japanese yen rose 0.3% to 153.85 per dollar Cryptocurrencies
Bitcoin fell 0.6% to $68,189.6 Ether fell 0.7% to $1,994.5 Bonds
The yield on 10-year Treasuries advanced four basis points to 4.18% Germany’s 10-year yield was little changed at 2.81% Britain’s 10-year yield was little changed at 4.50% The yield on 2-year Treasuries advanced six basis points to 3.52% The yield on 30-year Treasuries advanced three basis points to 4.81% Commodities
West Texas Intermediate crude rose 2.9% to $65.80 a barrel Spot gold rose 0.8% to $5,064.01 an ounce ©2026 Bloomberg L.P.
