January jobs report resets rate expectations and weighs on the Nasdaq
Feb 11, 2026
Blog,Opinion
Feb 11, 2026
After the January US jobs report landed, markets traded with a split tone: the S&P 500 hovered near record territory while the Nasdaq slipped, reflecting how quickly rate-cut expectations can reprice when labor data surprises to the upside.
A key backdrop is that the S&P 500 has struggled to close above 7,000, with technicians and strategists watching that area closely in early 2026.
The Bureau of Labor Statistics reported +130,000 in nonfarm payrolls for January, with the unemployment rate at 4.3%.
Wages also came in firm: average hourly earnings rose 0.4% month over month and 3.7% year over year, and the average workweek edged up to 34.3 hours.
Indicator | January 2026 result |
Nonfarm payrolls | +130,000 |
Unemployment rate | 4.3% |
Avg hourly earnings (m/m) | +0.4% |
Avg hourly earnings (y/y) | +3.7% |
Avg workweek | 34.3 hours |
BLS highlighted gains in health care, social assistance, and construction, while federal government and financial activities lost jobs.
Alongside the headline beat, the annual benchmark and seasonal updates also mattered for context. Coverage of the release noted a sharp downward revision to 2025 job gains, from 584,000 previously reported to 181,000.
Strong labor data can be positive for growth expectations, but it can also lift Treasury yields and push out the expected timing of policy easing. Reuters and Bloomberg coverage pointed to higher yields and investors paring back Fed cut expectations after the report.
Reuters also reported that a renewed selloff in software weighed on broader market performance during the session, even as other areas held up better.
Even with the S&P 500 near record levels, leadership has not been uniform. MarketWatch highlighted relative strength in value-oriented groups while technology has lagged, which helps explain why the Nasdaq can struggle on days when the broader index looks steady.
Markets rarely trade the payroll print in isolation. They trade what it implies for:
the next inflation prints
the timing of the first cut
and the level of yields investors will accept across the curve
When yields rise quickly, exposures that can move together include:
duration-heavy growth (longer cash-flow profiles)
index concentration (a small group driving index direction)
rate-sensitive sectors dependent on easier financial conditions
Are your largest positions indirectly a single bet on falling yields?
What happens to your portfolio if the 2-year yield reprices higher again?
Do your stops and sizing rules assume stable cross-asset correlations?
Near-term market direction is likely to hinge on whether upcoming inflation data confirms the post-jobs repricing that policy easing may come later than investors expected.
Key items to track:
CPI prints and inflation expectations
follow-through in Treasury yields (especially the 2-year)
earnings guidance from rate-sensitive industries, including software
whether the S&P 500 can clear and hold above 7,000
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