Major US stock indices closed slightly lower on Wednesday. US non-farm payrolls increased by 130,000 in January, significantly surpassing expectations, while the unemployment rate fell to 4.3%. The strong jobs data reduced the likelihood of the Federal Reserve needing to implement another interest rate cut before mid-year.
At market close, the Dow Jones Industrial Average declined by 66.74 points, or 0.13%, to 50,121.40. The Nasdaq Composite dropped 36.01 points, or 0.16%, settling at 23,066.47. The S&P 500 edged down 0.34 points, or 0.01%, finishing at 6,941.45. Shares of Microsoft and Google each fell approximately 2%. NVIDIA and Apple saw gains of less than 1%, while Micron Technology surged nearly 10%. The Nasdaq Golden Dragon China Index closed 0.65% lower, though Kingsoft Cloud Holdings gained 10%.
In European markets, Germany's DAX 30 index decreased by 125.04 points, or 0.50%, to 24,860.78. The UK's FTSE 100 index rose by 112.46 points, or 1.09%, to 10,466.30. France's CAC 40 index fell 14.64 points, or 0.18%, to 8,313.24. The Euro Stoxx 50 index declined 9.51 points, or 0.16%, to 6,037.55. Spain's IBEX 35 index dropped 91.45 points, or 0.50%, to 18,026.15, and Italy's FTSE MIB index lost 317.49 points, or 0.68%, closing at 46,485.50.
In the cryptocurrency market, Bitcoin fell nearly 1.7% to $67,701, while Ethereum declined over 3% to $1,961.
The US Dollar Index, which measures the dollar against a basket of six major currencies, increased by 0.04% to 96.834. By the end of New York trading, one euro was worth $1.1882, down from $1.1894 the previous day. One pound sterling traded at $1.3637, lower than the prior session's $1.3666. The dollar bought 152.83 Japanese yen, down from 154.49, and 0.7703 Swiss francs, up from 0.7682. It also traded at 1.3561 Canadian dollars, up from 1.3551, and 8.8813 Swedish krona, down from 8.9021.
Spot gold rose 1.18% to $5,082.47 per ounce, while spot silver was at $84.241 per ounce.
In the oil market, West Texas Intermediate crude for March delivery increased by 67 cents, or 1.05%, to settle at $64.63 per barrel. Brent crude for April delivery rose 60 cents, or 0.87%, to close at $69.40 per barrel.
Analysis of the non-farm payroll report indicated that the acceleration in US job growth in January, alongside a lower unemployment rate, signals stabilization in the labor market. This may provide the Federal Reserve room to keep interest rates unchanged for some time as policymakers monitor inflation. The better-than-expected job growth was partly attributed to seasonal industries like retail and delivery services hiring fewer holiday workers than usual last year, leading to smaller-than-typical layoffs in January. Despite the job gains, the labor market remains subdued, struggling even amid strong economic growth. Concerns over employment and high inflation have dampened public satisfaction with the current administration's economic policies.
Data showed the US budget deficit narrowed to $697 billion in the first four months of the fiscal year, down 17% from $840 billion a year earlier, driven by a 12% increase in revenues outpacing a 2% rise in spending. Tariff revenue from October to January totaled $124 billion, a significant increase. The Congressional Budget Office estimated that maintaining currently registered tariffs could reduce the federal deficit by $3 trillion over a decade, though this would not fully offset other deficit-increasing factors in the administration's economic plan.
The Federal Reserve is reportedly planning to drop some previously issued warnings requiring banks to fix deficiencies, as part of a broader shift in supervisory focus towards immediate financial risks rather than procedural issues. This change applies to certain "matters requiring attention" and "matters requiring immediate attention."
The Bank of Canada's meeting minutes highlighted that recent US actions on trade, foreign policy, and central bank independence are increasing global uncertainty and volatility. The bank kept its interest rate steady at 2.25% in January for the second consecutive time, noting the heightened uncertainty makes the timing and direction of the next rate move difficult to predict. The minutes cited US trade policies and threats to Federal Reserve independence as key sources of instability.
In corporate news, Bill Ackman's Pershing Square disclosed a new position in Meta Platforms, representing about 10% of its capital, or roughly $2 billion, as of the end of 2025. The firm believes recent stock weakness stems from investor concerns over AI investments but views Meta's business model as a prime beneficiary of AI integration, potentially enhancing content recommendations, advertising, and new ventures like wearables or AI assistants. Pershing Square began building the position in November at an average cost of $625 per share.
McDonald's reported its fastest US comparable sales growth in over two years for the fourth quarter, with a 6.8% increase, driven by its value-focused strategy, including $5 meal deals. The company stated that its emphasis on affordability helped improve customer traffic and average spending per visit.
Cisco Systems provided an upbeat quarterly revenue forecast of $15.4 billion to $15.6 billion, exceeding analyst expectations, citing strong demand from customers building AI infrastructure. The company has been adapting its networking equipment to handle massive AI data workloads. Its stock rose 30% last year.
According to reporter Mark Gurman, Apple's planned significant upgrade for its Siri voice assistant has faced setbacks in recent testing, potentially delaying the rollout of some highly anticipated features. While some functions were initially slated for a March update, issues may push their release to later updates, possibly even September.
On the ratings front, Bernstein raised its price target for Apple from $325 to $340, while UBS increased its target for NVIDIA from $235 to $245.
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