U.S. markets rallied in early trading after the delayed January jobs report surprised to the upside, driving the S&P 500 toward a critical resistance level. Employers added 130,000 jobs, significantly beating expectations of around 70,000 and well above the modest growth seen in late 2025, while the unemployment rate fell to 4.3%. Average hourly earnings and hours worked also came in stronger than forecast, reinforcing signs of sustained labor market resilience and lifting investor sentiment.
The strength in the report has boosted optimism that economic activity remains solid, but it may complicate Federal Reserve policy. A robust labor market generally reduces the urgency for cutting interest rates, which had been anticipated by some traders. This dynamic could keep longer-term yields elevated and limit scope for easier monetary accommodation.
Timing and positioning remain key for equity reactions, as previous attempts to break through major technical barriers have failed. A breakout above resistance now hinges on whether this jobs surprise fundamentally shifts expectations for growth and rates.
In stocks, earnings reactions were mixed. Crypto-linked trading platforms underperformed after weak results, while several technology and infrastructure names reported upside surprises. Banking, cloud computing, and semiconductor sectors also saw differentiated outcomes, highlighting divergence within the market. Upcoming data releases, including initial jobless claims and CPI readings, could guide the next phase of market direction. Key tickers to watch include $SPY (State Street SPDR S&P 500 ETF), $JPM (JPMorgan Chase & Co), $NVDA (NVIDIA Corporation), $MSFT (Microsoft), and $HOOD (Robinhood Markets Inc.) .
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