(Feb 11): US stocks rallied on Wednesday as traders cheered a stronger-than-expected jobs report.
The S&P 500 Index advanced 0.4% at 9.57am in New York, with the gauge headed for an all-time high. The technology-heavy Nasdaq 100 Index climbed 0.5% and the Cboe Volatility Index hovered at around 17.
“The market got the jobs report it needed,” said Brad Smith, portfolio manager at Janus Henderson Investors. “Ultimately, this print is an indication that the feared softness in the labour market is not materialising and that the strong productivity led economic growth we are experiencing is not coming at the cost of jobs.”
Payrolls rose in January by the most in more than a year, while the unemployment rate unexpectedly fell, according to data from the Bureau of Labor Statistics. Employers added 130,000 jobs last month and the unemployment rate declined to 4.3%.
After a year marked by rising unemployment and minimal hiring, the data — which was originally scheduled for Feb 6, but was delayed by the partial government shutdown — suggests the labour market is finding its footing.
“Despite labour market softening observed last year, we believe economic strength coming out of 2025 and carrying into this year should leave companies reluctant to fire, while tight labour supply should keep a lid on the unemployment rate,” said Jennifer Timmerman, senior investment strategy analyst at Wells Fargo Investment Institute.
See also: Bond traders look to jobs data, stocks for gut check on rally
The “bigger implication” from the stronger-than-expected jobs numbers could be for the stock market, Brad Conger, chief investment officer at Hirtle Callaghan said.
“A stronger job market will support the ‘broadening trade’ – the rotational to industrial cyclicals and consumer discretionary from technology,” Conger explained. “We like homebuilders, REITs and luxury goods as potentially under-appreciated beneficiaries of stronger growth.”
See also: Nasdaq 100 sinks 2% as AI jitters roil Wall Street
Following the jobs print, traders leaned towards the year’s first interest-rate cut happening in July. Traders had seen June as a possibility, and had ramped up bets for April after retail sales disappointed.
The Federal Reserve is likely to hold rates at the current level, Quilter’s Lindsay James said. In turn, Fed chair nominee Kevin Warsh will likely be put under pressure from the Trump administration to cut rates.
Investors currently view the US as a “kaleidoscope of contrasting and clashing elements,” James said. On one hand “economic growth has been revised up by many economists,” while on the other there are signs of strain in household finances and consumer staples companies have warned on shoppers on lower incomes are cutting back.
“Furthermore, with significant downward revisions to 2025 figures, investors may be wary to extrapolate one month of data,” James added. “Whilst from a purely financial standpoint it is the aggregate figures that investors focus on, the current picture of US economic success is neither broad nor deep, making it susceptible to a future reality check.”
In terms of single-stock moves, Lattice Semiconductor Corp jumped 16% after giving a stronger-than-expected revenue forecast.
Mattel Inc slumped 27% as the toymaker’s earnings per share forecast missed consensus estimates. Kraft Heinz Co declined 2.2% as the packaged food company halted plans to split in two to concentrate on bolstering profitability. Moderna Inc tumbled 11% as US regulators refused to review its novel mRNA flu vaccine.
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