Strong Jobs Data May Lead To Initial Strength On Wall Street

The major U.S. index futures are currently pointing to a higher open on Wednesday, with stocks likely to move to the upside following the lackluster performance seen in the previous session.

The futures advanced following the release of a closely watched Labor Department report showing employment in the U.S. increased by much more than expected in the month of January.

The Labor Department said non-farm payroll employment jumped by 130,000 jobs in January after rising by a downwardly revised 48,000 jobs in December.

Economists had expected employment to climb by 70,000 jobs compared to the addition of 50,000 jobs originally reported for the previous month.

The report also said the unemployment rate edged down to 4.3 percent in January from 4.4 percent in December, while economists had expected the unemployment rate to remain unchanged.

The data is likely to generate optimism about the strength of the U.S. economy but may also reduce the chances of near-term interest rate cuts by the Federal Reserve.

On Friday, the Labor Department is scheduled to release a separate report on consumer price inflation that may shed additional light on the outlook for rates.

After moving notably higher over two previous sessions, stocks showed a lack of direction during trading on Tuesday. While the Dow reached a new record intraday high in early trading, the Nasdaq and the S&P 500 spent the day bouncing back and forth across the unchanged line.

The major averages eventually ended the day mixed. The Dow inched up 52.27 points or 0.1 percent to 50,188.13, but the S&P 500 fell 23.01 points or 0.3 percent to 6,941.81 and the Nasdaq slid 136.20 points or 0.6 percent to 23,102.47.

The choppy trading on Wall Street came as traders seemed reluctant to make significant moves ahead of the release of the Labor Department’s closely watched monthly jobs report.

Meanwhile, traders largely shrugged off a Commerce Department report showing retail sales in the U.S. were unexpectedly flat in the month of December.

The report said retail sales came in virtually unchanged in December after climbing by 0.6 percent in November. Economists had expected retail sales to rise by 0.4 percent.

Excluding a slight dip in sales by motor vehicle and parts dealers, retail sales were still virtually unchanged in December after increasing by 0.4 percent in November. Ex-auto sales were expected to grow by 0.3 percent.

“The December retail sales report shows that consumers paused their spending at the end of the holiday season after a strong spending spree in October and November,” said Nationwide Chief Economist Kathy Bostjancic.

She added, “The stagnant retail sales in December provides a soft hand-off to Q1 consumer spending, but we look for a surge in tax refunds, estimated to be $50 billion higher than last year, and the still strong wealth effect will buoy consumer spending in Q1 and support solid GDP growth.”

A separate report released by the Labor Department showed import prices in the U.S. crept up in line with estimates in the month of December.

Housing stocks showed a substantial move to the upside amid a notable decrease by treasury yields, driving the Philadelphia Housing Sector Index up by 3.4 percent to a five-month closing high.

Other interest rate-sensitive stocks like utilities and commercial real estate stocks also turned in strong performances, with the Dow Jones Utility Average jumping by 1.9 percent and the Dow Jones U.S. Real Estate Index climbing by 1.3 percent.

On the other hand, brokerage stocks moved sharply lower on the day, dragging the NYSE Arca Broker/Dealer Index down by 2.5 percent. The index ended the previous session at a record closing high.

Computer hardware, airline and oil service stocks also showed notable moves to the downside over the course of the session.

Commodity, Currency Markets

Crude oil futures are surging $1.52 to $65.48 a barrel after falling $0.40 to $63.96 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $5,073.60, up $42.60 compared to the previous session’s close of $5,031. On Tuesday, gold slid $48.40.

On the currency front, the U.S. dollar is trading at 153.59 yen compared to the 154.38 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.1865 compared to yesterday’s $1.1894.

Asia

Asian stocks ended mixed on Wednesday as softer-than-expected U.S. retail sales data and growing unease over AI prompted traders to book some profits after recent gains.

China’s headline inflation readings for January 2026 underscored still-weak household demand and reinforced expectations of continued monetary support.

The dollar slipped and gold traded higher above $5,060 an ounce even as comments from some Federal Reserve officials dampened hopes for interest rate cuts.

Oil ticked higher as supply risks stemming from tensions in the Middle East outweighed industry data showing a big rise in stockpiles.

Japanese markets were closed for the National Founding Day. China’s Shanghai Composite Index finished little changed at 4,131.98 as deflation worries lingered.

China’s annual consumer price inflation unexpectedly cooled from 0.8 percent in December to 0.2 percent in January, raising fresh concerns about persistent deflationary pressures in the world’s second-largest economy.

The deflation in producer price inflation persisted, with prices falling 1.4 percent year-on-year in January after declining 1.9 percent in December. Hong Kong’s Hang Seng Index edged up by 0.3 percent to 27,266.38.

Seoul stocks ended higher for a third consecutive session, with automakers and financials leading the surge. The Kospi surged 1 percent to close at 5,354.49.

Hyundai Motor soared 5.9 percent and its affiliate Kia Corp. jumped 4.6 percent amid expectations for the robotics sector.

Australian markets rallied to hit a three-month high, led by banking ad gold mining stocks. The benchmark S&P/ASX 200 Index surged 1.7 percent to 9,014.80, while the broader All Ordinaries Index settled 1.6 percent higher at 9,281.80.

Commonwealth Bank of Australia shares climbed 6.8 percent after the country’s largest bank clocked record-high cash earnings in the half year to December, buoyed by growth in its flagship mortgage business.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index finished marginally lower at 13,507.28.

Europe

European stocks are turning in a mixed performance on Wednesday as investors digest mixed earnings news. Technology stocks came under pressure after Dassault said it is facing pressure from a soft European automotive sector.

While the U.K.’s FTSE 100 Index is up by 0.8 percent, the French CAC 40 Index is nearly unchanged and the German DAX Index is down by 0.3 percent.

TotalEnergies rose 1.3 percent. The French oil major raised its final 2025 dividend payout by 5.6 percent to €3.40 per share.

Software maker Dassault Systemes plummeted 20 percent after reporting softer-than-expected fourth quarter results and issuing weak guidance for this year.

Dutch staffing firm Randstad slumped 8.5 percent after issuing soft Q1 guidance.

Supermarket group Ahold Delhaize soared 7 percent after fourth-quarter financial results exceeded expectations.

Heineken jumped 5.3 percent. The struggling brewer announced significant job cuts of up to 6000 roles worldwide.

German lender Commerzbank tumbled 3 percent despite reporting a record operating result of €4.5 billion for the 2025 financial year.

Siemens Energy surged 6 percent after its first-quarter profit nearly tripled, boosted by AI-driven demand for gas turbines and grid equipment.

Electrolyser maker Thyssenkrupp Nucera added 1.1 percent after backing its FY26 outlook.

Schindler Holding plunged 8 percent. The Swiss lift and escalator maker said it expects 2026 revenue to grow by low- to mid-single digits in local currencies.

British engineering firm Renishaw surged 2.7 percent after reporting better-than-expected half-year results.

Barratt Redrow, a residential property developer, lost 6.3 percent after first-half profit came in below expectations.

London Stock Exchange Group shares rose 2.5 percent following reports that activist hedge fund Elliott Management has built a significant stake in the data provider.

U.S. Economic News

A closely watched report released by the Labor Department on Wednesday showed employment in the U.S. increased by much more than expected in the month of January.

The Labor Department said non-farm payroll employment jumped by 130,000 jobs in January after rising by a downwardly revised 48,000 jobs in December.

Economists had expected employment to climb by 70,000 jobs compared to the addition of 50,000 jobs originally reported for the previous month.

The report also said the unemployment rate edged down to 4.3 percent in January from 4.4 percent in December, while economists had expected the unemployment rate to remain unchanged.

At 10:10 am ET, Kansas City Federal Reserve President Jeffrey Schmid is scheduled to speak on monetary policy and the economic outlook before the Economic Forum of Albuquerque.

Federal Reserve Vice Chair for Supervision Michelle Bowman is due to participate in a discussion on “Supervision and Regulation” before virtual Keefe, Bruyette & Woods 33rd Annual Winter Financial Services Conference at 10:15 am ET.

At 10:30 am ET, the Energy Information Administration is scheduled to release its report on crude oil inventories in the week ended February 6th. Crude oil inventories are expected to edge down by 0.2 million barrels.

The Treasury Department is due to announce the results of this month’s auction of $42 billion worth of ten-year notes at 1 pm ET.

At 4 pm ET, Cleveland Federal Reserve President Beth Hammack is due to participate in a leadership dialogue hosted by the Ohio State University John Glenn College of Public Affairs.