Strong US Jobs Data Hits Bonds, Stocks Fade – US Market Wrap

A stronger-than-expected US jobs report triggered a selloff in Treasuries as traders scaled back expectations for Federal Reserve rate cuts in 2026. An early rally in major stock indexes faded, while cryptocurrencies declined.

Short-dated Treasuries bore the brunt of the move, with two-year yields hovering near 3.5%. Money markets shifted expectations for the next Fed cut to July from June. Nearly 300 stocks in the S&P 500 advanced on optimism that economic strength will support earnings, but the benchmark was little changed as most megacap shares fell. An ETF tracking software companies dropped 2.6%. Bitcoin slid to around $67,500.

US payrolls rose in January by the most in more than a year, and the unemployment rate unexpectedly fell, suggesting the labor market remains resilient. Employers added 130,000 jobs last month, while the jobless rate declined to 4.3%. However, revisions to the prior year showed a significant slowdown in hiring, with average monthly job gains revised down to 15,000 from the previously reported 49,000.

The S&P 500 hovered near 6,940. Real estate services companies declined as investors evaluated their exposure to new AI tools that could disrupt parts of the industry. Micron Technology rose after telling investors it is executing well.

The yield on two-year Treasuries climbed six basis points to 3.51%, while the 10-year yield rose three basis points to 4.17%. The dollar wavered. Oil advanced as geopolitical risks outweighed concerns about a growing supply glut.