[New York Stock Market] Slightly Lower Despite Strong January Jobs Data... Rally Stalls (Comprehensive)

Stronger-Than-Expected January Jobs Report
Concerns Over Job Concentration and Repeated Downward Revisions
Expectations for Fed Rate Cuts Also Recede

The three major New York stock indexes ended slightly lower despite the strongest January employment data in a year. The weakness was attributed to the fact that job gains were concentrated only in specific sectors such as healthcare, to repeated downward revisions to past employment data, and to fading expectations for a benchmark interest rate cut. As a result, the three-day winning streak of the Dow Jones Industrial Average came to a halt.

On the 11th (U.S. Eastern time), the Dow Jones Industrial Average on the New York Stock Exchange (NYSE) closed at 50,121.40, down 66.74 points (0.13%) from the previous session. The large-cap S&P 500 Index edged down 0.00%, and the tech-heavy Nasdaq Composite Index finished 0.16% lower.

The New York stock market opened lower as it digested the January employment report. Amid doubts about the strength of the labor market and concerns about stretched valuations, the major indexes showed volatility and ultimately retreated into the close.

The Bureau of Labor Statistics (BLS) under the U.S. Department of Labor said that U.S. nonfarm payrolls in January increased by 130,000 from the previous month. The increase was not only sharply higher than in December last year (48,000), but also 2.4 times the Dow Jones consensus forecast of 55,000. The unemployment rate fell to 4.3%, down from 4.4% a month earlier and below market expectations of 4.4%.

U.S. financial media outlet CNBC pointed out as a limitation that, despite being an unusually strong set of employment figures, the gains were concentrated in specific sectors such as healthcare. It also cited as a concern the fact that employment figures for every month of 2025 were revised downward.

Rick Wedell, Chief Investment Officer (CIO) at RFG Advisory, said, "Overall, it is a positive signal, but it is hard to say that the labor market has fully recovered," adding, "We are moving in the right direction, but it is still very fragile."

Expectations for an interest rate cut by the U.S. Federal Reserve (Fed) have diminished. Brad Smith, portfolio manager on the U.S. fixed income and corporate credit team at Janus Henderson, said, "This set of data makes it highly likely that the Fed will lean toward keeping rates on hold at next month's meeting."

By sector, software stocks were weak again. Amid concerns about industry restructuring driven by artificial intelligence (AI), Salesforce and ServiceNow fell 4% and 5%, respectively, from the previous session. In contrast, economically sensitive stocks and AI infrastructure names were strong, with digital infrastructure company Vertiv surging about 24%, and equipment maker Caterpillar and others also closing higher.

Semiconductor-related stocks were also solid. Nvidia and Broadcom were only slightly higher, but TSMC, Lam Research, Applied Materials, KLA, and Intel rose by around 3%. Micron Technology, in particular, jumped 10% after saying it was supplying "HBM4" to Nvidia without any issues.

On expectations for robust fundamentals, U.S. Treasury yields moved higher. The 10-year U.S. Treasury yield, the global benchmark for bond rates, was trading around 4.172%, up 2.7 basis points (1bp = 0.01 percentage point) from the previous session. The 2-year U.S. Treasury yield, which is sensitive to monetary policy, was at 3.512%, up 5.8 basis points from the previous day. CNBC reported, "Yields on U.S. Treasuries spiked immediately after the report was released, but gave back gains as expectations for Fed rate cuts receded."