Major US stock indexes fell as concerns about AI disruption weighed on markets. The Nasdaq dropped 2.10%, while the S&P 500 and Dow Jones declined 1.39% and 1.23%.The US added 130,000 jobs in January, the strongest monthly increase in over a year and above expectations. The unemployment rate fell to 4.3% from 4.4%. Job gains were led by health care, social assistance, and construction. However, total job growth for 2025 was revised sharply lower, from 584,000 to 181,000.Inflation eased, with January CPI rising 2.4% year over year compared to 2.7% in December. Core prices increased 0.3% month over month. December retail sales were flat and below expectations.
The strong jobs data reduced expectations for near term rate cuts. According to CME FedWatch, the probability that the Fed will keep rates unchanged through June rose from about 25% to over 40% after the report. Weekly unemployment claims declined to 227,000. US Treasuries gained, and the 10 year yield fell to a year to date low as technology stocks weakened.
In Europe, the STOXX Europe 600 rose 0.09%, reaching a new high before closing flat. Germany’s DAX gained 0.78%, France’s CAC 40 rose 0.46%, and the UK’s FTSE 100 increased 0.74%, while Italy’s FTSE MIB fell 0.97%.
