US equities moved higher on Wednesday after a stronger-than-expected January jobs report eased concerns about slowing economic momentum and reinforced confidence in the resilience of the labour market.
The Dow Jones Industrial Average rose 207 points, or about 0.4%.
The S&P 500 gained 0.6%, while the Nasdaq Composite advanced 0.8%, as investors responded positively to the data.
Jobs report beats expectations
The rally followed the release of the January nonfarm payrolls report from the Bureau of Labor Statistics, which had been delayed due to a partial government shutdown that ended on February 3.
The report showed that US employers added 130,000 jobs in January, well above the 55,000 increase forecast by economists surveyed by Dow Jones.
The figure also marked a sharp improvement from December’s revised gain of 48,000.
The unemployment rate edged down to 4.3%, slightly below expectations for 4.4%, providing further evidence of continued labour market stability.
The data delivered a rare upside surprise after months of subdued hiring and helped ease fears that the economy was drifting toward a prolonged slowdown.
Benchmark revisions temper optimism
Alongside the headline strength, the report included annual benchmark revisions that painted a weaker picture of recent labour market performance.
Updated estimates showed that the US economy added just 181,000 jobs in 2025, sharply lower than the previously reported 584,000.
The revisions highlighted that hiring momentum had been more subdued over the past year than earlier data suggested.
Even so, investors focused primarily on the January rebound, which suggested that labour demand remains resilient despite tighter financial conditions and slower consumer spending.
Rebound follows weak consumer data
Wednesday’s gains followed a weaker session on Tuesday, when markets were pressured by disappointing retail sales data.
The US Commerce Department reported that consumer spending was flat in December, missing forecasts for a 0.4% increase.
The soft consumer data had raised concerns that higher inflation and borrowing costs were weighing more heavily on household budgets.
The strong jobs report helped counter those worries by signalling that employment conditions remain supportive.
In the prior session, the S&P 500 fell as concerns over artificial intelligence’s impact on financial services companies weighed on sentiment, while the Nasdaq also posted losses.
The Dow, however, managed to notch another record close.
Focus turns to inflation data
With the labour market showing renewed strength, attention is now shifting to inflation indicators that could further influence monetary policy expectations.
The January Consumer Price Index is scheduled for release on Friday and is expected to provide fresh insight into price pressures across the economy.
The data will be closely watched by investors and policymakers alike for signals on whether inflation is cooling sufficiently to justify further easing.
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