Global stock markets rallied on Wednesday following a stronger-than-expected US jobs report for January, though the positive momentum was tempered by significant annual revisions to previous data.
The US economy added 130,000 jobs last month, the Bureau of Labor Statistics reported, nearly double the forecast of economists. The unemployment rate fell slightly to 4.3%. Initially, the data was interpreted as a sign of resilient economic growth, supporting global equities. US indices opened higher, with the S&P 500 and Nasdaq gaining 0.7% and 0.9% respectively. European markets, including the FTSE 100 and CAC 40, also posted gains, while major Asian markets had closed higher prior to the release.
However, analysts highlighted that the report’s positive impact was complicated by a major annual revision. The revision subtracts 818,000 jobs from the previously reported total for the year ending March 2024, effectively eliminating what was thought to be net job growth for that period. “The revisions suggest there was virtually no jobs growth in the US last year,” noted Kathleen Brooks, research director at XTB.
The stronger headline number, coupled with the revisions, created a mixed信号 for Federal Reserve policy. While the robust January data might reduce the urgency for immediate interest rate cuts, the downward revisions underscore earlier economic softness. Bond yields rose following the report, reflecting reduced expectations for near-term rate reductions. The US dollar also strengthened against a basket of currencies.
“The jobs report is a positive sign for the US growth outlook, yet it may come with the cost of foregoing an additional rate cut by the Fed, at least in the near future,” said Patrick O’Hare of Briefing.com.
Corporate news influenced individual stocks. Siemens Energy surged 7.8% as AI-driven electricity demand boosted its profits, while TotalEnergies rose 1.8% after announcing share buybacks despite a profit drop. Conversely, French software firm Dassault Systemes fell over 21% on lower-than-expected sales. Elsewhere, Heineken shares climbed 3.7% after the brewer announced plans to cut 6,000 jobs.
Oil prices rose more than 2.5% amid heightened geopolitical tensions in the Middle East, ahead of expected discussions between the Israeli and US governments regarding Iran’s nuclear program.
Overall, the market reaction illustrates a complex assessment of the US economic trajectory. While the immediate jobs data surprised to the upside, the substantial revisions prompted caution, leaving the Federal Reserve’s future policy path and the durability of consumer spending as key points of uncertainty for investors.
