Stock Market Update

[BRIEFING.COM] The S&P 500 (flat), Nasdaq Composite (-0.2%), and DJIA (-0.1%) traded in a tight range near their flatlines for the bulk of the session after some notable swings early on. The modest weakness snaps a three-day streak of record highs for the DJIA. 

Stocks opened to solid gains following this morning's release of the January Employment Situation Report, which showed 130K payrolls added in January (Briefing.com consensus 68K). While the headline figure generated some positive buzz around the U.S. growth outlook, it also tempered the market's expectations for its next rate cut from the Fed. The probability of at least a 25-basis point rate cut at the June 17 FOMC meeting now stands at around 60%, down from just over 75% yesterday, according to the CME FedWatch tool. 

After retreating from the opening highs, stocks largely drifted sideways. True to 2026 form, strength in the broader market had a positive tilt, with select cyclical and defensive sectors posting solid gains, while mega-caps faced weakness. 

Amazon (AMZN 204.20, -2.70, -1.31%) and Alphabet (GOOG 311.24, -7.39, -2.32%) continued to face pressure after their earnings releases last week, weighing on the communication services (-1.3%) and consumer discretionary (-0.6%) sectors. 

The information technology sector (+0.3%) had the bumpiest morning but managed to close modestly higher as the broader AI infrastructure landscape had a solid day. The PHLX Semiconductor Index (+2.3%) was lifted by a sharp rebound in memory storage names such as Sandisk (SNDK 599.34, +57.70, +10.65%) and Micron (MU 410.34, +37.09, +9.94%) after some weakness yesterday. 

Software stocks, on the other hand, faced renewed pressure after some relief in the previous session. The iShares GS Software ETF (IGV) finished 2.6% lower, and Microsoft (MSFT 404.37, -8.90, -2.15%) was once again a mega-cap laggard. 

Earnings also played a role in today's action, with several sectors' best and worst performing components being results of this morning's releases.

Smurfit Westrock plc (SW 50.28, +4.53, +9.90%) contributed to a solid day for the materials sector (+1.3%), while Generac (GNRC 214.99, +32.69, +17.93%) was the best-performing S&P 500 name, helping the industrials sector (+0.5%) notch a gain. 

Meanwhile, Robinhood Markets (HOOD 78.07, -7.53, -8.80%) was one of the worst-performing S&P 500 names after missing revenue expectations. The financials sector (-1.5%) was a laggard as major banking and financial services stocks saw a continuation of yesterday's weakness. 

Elsewhere, the energy sector (+2.6%) finished as the best-performing S&P 500 sector as heightening geopolitical tensions between the U.S. and Iran contributed to crude oil futures settling today's session $0.59 higher (+0.9%) at $64.60 per barrel. 

The consumer staples sector (+1.5%) also logged a nice gain on broad strength throughout the sector as it rebounded from yesterday's weakness that followed a flat retail sales report for December. 

Outside of the S&P 500, the Russell 2000 (-0.4%) and S&P Mid Cap 400 (-0.2%) were never able to reclaim their opening gains. 

Overall, the session underscored the market's familiar push-and-pull between resilient breadth and ongoing mega-cap pressure, leaving the major averages little changed by the close. With rate-cut expectations recalibrating and earnings continuing to drive sharp single-stock moves, the market proceeded cautiously in anticipation of its next catalysts. 

U.S. Treasuries retreated on Wednesday with the short end leading the move, though the entire complex spent the day in a steady rally off lows that were reached in immediate reaction to a stellar jobs report for January (130,000; Briefing.com consensus 68,000). The 2-year note yield settled up six basis points to 3.51%, and the 10-year note yield settled up three basis points to 4.17%. 

• S&P Mid Cap 400: +8.4% YTD
• Russell 2000: +7.6% YTD
• DJIA: +4.3% YTD
• S&P 500: +1.4% YTD
• Nasdaq Composite: -0.8% YTD

Reviewing today's data:

• Weekly MBA Mortgage Applications Index -0.3%; Prior -8.9%
• January Nonfarm Payrolls 130K (Briefing.com consensus 68K); Prior was revised to 48K from 50K, January Nonfarm Private Payrolls 172K (Briefing.com consensus 60K); Prior was revised to 64K from 37K, January Unemployment Rate 4.3% (Briefing.com consensus 4.4%); Prior 4.4%, January Average Hourly Earnings 0.4% (Briefing.com consensus 0.3%); Prior was revised to 0.1% from 0.3%, January Average Workweek 34.3 (Briefing.com consensus 34.2); Prior 34.2
  • The key takeaway from the report is that it is a positive sign for the U.S. growth outlook, yet it may come with the cost of foregoing an additional rate cut by the Fed, at least in the near future.
• The Treasury's budget deficit was $94.6 billion in January (Briefing.com consensus: -$190.0B), which was much narrower than expected and a notable improvement from the same period a year ago when it was $128.6 billion. Receipts totaled $559.9 billion, while outlays summed to $654.6 billion.
  • The key takeaway from the report is that it shows the benefits of collecting customs duties as a means of reducing the deficit. At the same time, it also reflects the onerous interest costs stemming from the high amount of debt issuance needed to fund government operations. Weekly crude oil inventories increased by 8.53 million barrels after decreasing by 3.46 million barrels a week ago.