Stronger US Payrolls Lift Yields

US Treasury yields and dollar rise after strong January payrolls and wage data

Key Points

01Stronger-than-expected US January payrolls and firmer hourly earnings lifted Treasury yields, strengthened the dollar and reduced near-term Fed rate-cut odds.
02China's January CPI showed softer headline inflation, firmer core CPI and a narrowed PPI decline, which prompted mixed Asian market moves including Hang Seng gains.
03Sector-specific earnings and rate repricing drove divergence: Energy, consumer staples and materials outperformed while financials and communication services lagged.

Global Market Summary

U.S. equities finished mixed: the S&P 500 (SPX) rose 0.04% while the Dow Jones (DJIA) slipped 0.07% and the Nasdaq Composite (^IXIC) fell 0.12% after stronger-than-expected January payrolls and firmer wage data pushed Treasury yields higher and strengthened the dollar. In Europe the FTSE 100 (UKX) gained 1.14% while the CAC 40 (FRA40) fell 0.18% and the DAX (DAX) declined 0.53% as markets digested rate repricing and sector-specific earnings. Asia’s Hang Seng (HSI) rose 0.31% amid mixed China inflation prints showing softer headline CPI but firmer core and a narrowing PPI contraction.

Top Movers

Top sectors: Energy (XLE +2.72%), Consumer Staples (XLP +1.47%) and Materials (XLB +1.29%) outperformed, while Financials (XLF -1.39%) and Communication Services (XLC -0.68%) lagged. Notable gainers included TDC (+29.39%), DIOD (+27.00%) and VRT (+24.90%). Notable decliners included U (-26.00%), MAT (-25.39%) and ALAB (-21.38%).

Macro highlights

U.S. nonfarm payrolls rose 130,000 in January and the unemployment rate fell to 4.3%, with average hourly earnings up 0.4% month-over-month and 3.7% year-over-year; the stronger-than-expected report lifted Treasury yields and the dollar and reduced near-term Fed rate-cut odds. China’s January CPI rose 0.2% year-on-year while core CPI gained 0.8% and PPI’s year-on-year decline narrowed to -1.4% (0.4% m/m), a mix that suggests uneven headline inflation but firmer underlying demand.

News that moved markets

Humana (HUM) posted a Q4 loss and issued conservative 2026 EPS guidance, triggering premarket weakness in the stock. Generac (GNRC) missed Q4 estimates and recorded a one-time legal charge even as it authorized a $500m share repurchase, which pressured the share price. Penske Automotive (PAG) raised its quarterly dividend and disclosed share repurchases, providing a capital-return offset while Avantor (AVTR) outlined a 'Revival' turnaround program after reporting a full-year GAAP loss. Investindustrial completed its acquisition of TreeHouse Foods. Several announced transactions were reported, including Rezolve Ai's $230m acquisition of Reward and Endor Labs' acquisition of Autonomous Plane, alongside a set of smaller announced deals in commodities, marketing and technology services.

Upcoming session watchlist

01UK GDP Growth Rate (Q4, QoQ Prel) — consensus 0.2% vs 0.1% prior, Feb 12, 07:00 | Measures quarterly output growth and momentum for the UK economy.
02UK GDP Growth Rate (Q4, YoY Prel) — vs 1.3% prior, Feb 12, 07:00 | Shows year-over-year output growth pace across the UK economy.
03UK GDP (Dec, MoM) — forecast 0.1% vs 0.3% prior, Feb 12, 07:00 | Provides monthly snapshot of output growth in the UK economy.
04US Existing Home Sales (Jan) — consensus 4.25M vs 4.35M prior, Feb 12, 15:00 | Tracks housing demand through existing home sales volume in January.

Key Takeaways

01US equities finished mixed: the S&P 500 rose 0.04% while the Dow slipped 0.07% and the Nasdaq fell 0.12% after stronger payrolls and wage data lifted yields.
02In Europe, the FTSE 100 gained 1.14% while the CAC 40 fell 0.18% and the DAX declined 0.53% as markets digested rate repricing and sector-specific earnings.
03Notable stock moves included large gains in TDC, DIOD and VRT and steep declines in U, MAT and ALAB, alongside multiple deal announcements and M&A activity.

References