On Wednesday, the S&P 500 closed mostly flat, down 0.2%, following a slower-than-expected January jobs report that showed payroll growth of 130,000, falling short of economists’ expectations of 185,000. The unemployment rate edged down to 4.3%, slightly better than the forecast of 4.4%. While job growth was the largest in over a year, it was concentrated primarily in the health care sector.
Investors initially reacted positively, with Treasury yields rising and stock prices increasing, but enthusiasm faded as the likelihood of interest rate cuts by the Federal Reserve diminished. The report was juxtaposed with weaker consumer spending data from December.
Tech stocks continued to struggle, particularly in software, while shares of companies linked to economic growth, like construction and digital infrastructure, experienced gains. Notably, Vertiv’s stock surged 17% after positive earnings.
Looking ahead, the Consumer Price Index, an important inflation indicator, is set to be released, which could further influence market dynamics.
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