U.S. stocks wobbled Wednesday as a surprisingly strong Labor Department jobs report delivered both a boost for the economic outlook and a jolt to market expectations for interest-rate cuts. Investors digested the report’s sign that unemployment improved last month alongside the higher-for-longer message that can come when bond yields remain elevated.
After opening lower, major indexes briefly traded in different directions before investors settled into smaller moves. The S&P 500 ended with a minuscule decline of less than 0.1% after it had flipped between gains and losses, while the Dow Jones Industrial Average and the Nasdaq composite finished modestly lower following an early turnaround that erased earlier gains.
The jobs report showed employers added 130,000 jobs to their payrolls last month, a figure that was more than economists expected, according to the Labor Department data cited by the Associated Press. That helped calm worries from the previous day tied to a discouraging report that had led traders to question whether household spending—the “main engine of the economy”—might be stalling.
For equities, the market’s reaction reflected a tension familiar to investors around Federal Reserve policy: stronger labor-market data can reinforce hopes for economic staying power and company profits, while also supporting expectations that the Fed may keep rates higher for longer. AP reported that stocks in energy and raw-material industries rose on the day, reflecting their link to the broader health of the economy and earnings prospects.
At the same time, traders recalibrated the timing of rate cuts. After Wednesday’s report, expectations for when the Federal Reserve could begin cutting interest rates shifted further out, with CME Group data showing bets moved into the summer, AP said. The changes were tied to uncertainty over how quickly the labor market would weaken—an outcome that, AP noted, could have accelerated the Fed’s push toward cuts if the unemployment rate had risen or the job market had worsened.
Bond markets showed that the shift in expectations was still consistent with higher rates. The 10-year Treasury yield edged up to 4.17% from 4.16% late Tuesday, and the two-year yield climbed more, rising to 3.51% from 3.45% after the jobs report, AP reported.
The broader jobs picture included revisions that added another layer to the market’s balancing act. AP said the report included major revisions indicating employers added 181,000 jobs for all of last year—less than a third of the previously reported 584,000—and described it as the weakest showing for a year since 2020, when the COVID-19 shutdown hit the economy.
Individual stocks added to the day’s mixed tone. Smurfit Westrock jumped 9.9% even after reporting a weaker profit than analysts expected, and AP said it also provided financial targets for the next five years that some analysts found encouraging. Exxon Mobil climbed 2.6%, while Robinhood Markets fell 8.8% despite reporting a stronger-than-expected profit; AP said Robinhood’s revenue missed forecasts and analysts focused on its 2026 expense forecast and concerns about how long a crypto trading slowdown could last.
Outside traditional equity drivers, AP reported that bitcoin fell toward $67,000 Wednesday, losing close to half its value since setting a record in October. Moderna dropped 3.5% after AP reported that the U.S. Food and Drug Administration would not consider its application for a new flu vaccine made with Nobel Prize-winning mRNA technology, and Kraft Heinz recovered from an early loss to gain 0.4% after AP said CEO Steve Cahillane paused the company’s planned split into two businesses and announced a $600 million investment across marketing, sales and research and development.
For the day’s closing totals, AP reported the S&P 500 edged down by 0.34 to 6,941.47 points, the Dow declined 66.74 to 50,121.40, and the Nasdaq composite fell 36.01 to 23,066.47. Markets abroad were mixed, with the U.K.’s FTSE 100 gaining 1.1% and South Korea’s Kospi rising 1% after a better showing in Asia, AP said.
As Brian Jacobsen, chief economic strategist at Annex Wealth Management, told AP, “We all knew there would be downward revisions, but these were better than expected.”