Stocks, Yields Up As 130,000 Jobs Growth Surprises

Published as of: February 11, 2026, 9:18 a.m. ET

(Wednesday market open) The U.S. economy added 130,000 jobs in January, almost double the 70,000 expected, the government said today. Unemployment dipped to 4.3% from the prior 4.4%, and hourly earnings were also solid, up 0.4% from the prior month. Major indexes extended their earlier gains immediately after the nonfarm payrolls report, while Treasury yields quickly bounced from one-month lows.

"The market is aggressively pricing out rate cuts for this year after the jobs report," said Kevin Gordon, head of macro research and strategy at the Schwab Center for Financial Research. "The Fed looks vindicated in saying there has been some stabilization in the unemployment rate. The three-month average of nonfarm payrolls growth shifted up to 73,000 in January, the highest since February 2025."

Looking back at Tuesday, advancers easily outpaced decliners but the broader market sagged in tepid trading. Weak retail sales and worries about AI's impact on financial firms kept the pressure on. Jobs data dominates early today, but investors also scrutinize results from Shopify (SHOP) and Ford (F). Later today, stay tuned for Cisco (CSCO), a good barometer of general tech demand.

1. Drilling into jobs data: Peeling back today's nonfarm payrolls, the government downwardly revised November and December jobs growth by 17,000, not massive relative to previous ones. However, today's data also featured a dramatic downward benchmark revision of 862,000 on a non-seasonally adjusted basis to jobs reports released in the year ending last March, on the high end of expectations and the biggest downward revision since 2009. Employment growth last year fell to 181,000 from 584,000, seasonally adjusted. "Payroll gains in 2025 have been revised down to 181,000," Gordon said. "In the full history of payroll data, the only year that has been weaker when it comes to gains is 2003." Checking January's job growth by sector, the biggest gains were in health care and social assistance, continuing a trend where services sector jobs growth outpaces goods producing. Federal government jobs fell sharply, and so did financial activities employment. Other industries had little change, though manufacturing inched up for the first time since November 2024. In the immediate aftermath of the data, chances of a Federal Reserve rate cut next month fell dramatically to just 6% from 20% yesterday, while chances of at least one rate cut by June now stand at 60%, down from 75% a day ago.
    
2. Lower yields energize utilities, real estate: With Treasury yields retreating to one-month lows yesterday following soft retail sales data, rate-sensitive areas like utilities and real estate surged Tuesday. Home builders including Toll Brothers (TOL), D.R. Horton (DHI), KB Home (KBH), and Lennar (LEN) all climbed 5% or more and rose again today. Real estate also got a lift after the U.S. House passed bipartisan legislation designed to reduce regulation and spur more home building. This likely played into home builder strength, too. On a negative note, Zillow (Z) dropped 4% this morning despite an 18% year-over-year revenue rise.
    
3. Fed in focus watching for Powell, awaiting Warsh: Fed speakers so far this week showed no enthusiasm for a near-term rate cut, though noted dove Governor Stephen Miran takes the mic late tomorrow after three speakers opine today. Oddly, there's no calendar item for Fed Chairman Jerome Powell's semi-annual testimony to Congress. Discussions over a hearing date have occurred, Bloomberg reported last month, but the criminal investigation of Powell over alleged improprieties with the Fed's renovation project could disrupt the process. If Powell testifies, it might be noteworthy as President Trump tries to steer through his nomination of Kevin Warsh to replace Powell. One key Republican senator said he won't vote for Warsh unless the administration resolves the Powell investigation. Last week, Senate Banking Committee Chairman Tim Scott, a South Carolina Republican, said he didn't believe Powell committed any crimes. "Scott's comment seems like the start of a process of winding down the investigation, clearing the path for Warsh's hearing, though it remains uncertain exactly what the timing will be," said Michael Townsend, managing director of legislative and regulatory affairs at Schwab.

• Ford (F) advanced 1.6% in early trading after earnings missed consensus but revenue topped estimates and guidance looked solid.
   
• Cisco (CSCO) flattened ahead of earnings, due after the close. Last time, Cisco exceeded analysts' expectations and shares climbed 7% in the immediate aftermath. Shares went on a tear in mid-January and pushed above the all-time high reached during the original dot-com boom. Cisco's networking sales rose 15% in the most recent quarter. That segment will be watched today, as will the company's AI infrastructure business.
   
• AppLovin (APP) also reports after the close today, and shares plunged 5% early on. Last time out, the stock soared on earnings and guidance that exceeded estimates. AppLovin's key business is online advertising, which CNBC reported has made strides thanks to an AI advertising engine called AXON that improves ad targeting.
   
• Shopify (SHOP) soared 11% in early trading after the firm beat analysts' revenue estimates and said it expects solid first quarter revenue growth. The company also authorized a $2 billion share repurchase program.
   
• Vertiv (VRT), a data center infrastructure partner of Nvidia (NVDA), saw shares surge 17% today after an earnings beat and solid guidance. Nvidia shares barely budged.
   
• Mattel (MAT) plunged 27% ahead of the open after fourth quarter sales rose less than analysts had expected. Guidance also disappointed.
   
• T-Mobile (TMUS) dropped almost 2% before the open as earnings per share missed estimates, but revenue came in as expected.
   
• Kraft Heinz (KHC) dropped 7%. Earnings beat estimates and revenue was in line, but guidance disappointed. The company is pausing work on its planned split, saying its issues are "fixable and within our control."
   
• Lyft (LYFT) cratered 15% after its quarterly results saw revenue miss analysts' expectations. Guidance for first quarter bookings met consensus, and gross bookings climbed 19% last quarter.
   
• Cloudflare (NET) jumped 15% on an earnings beat.
   
• Humana (HUM) fell 6.5% despite beating analysts' earnings and revenue estimates.
   
• Moderna (MRA) slumped 10% after the U.S. Food and Drug Administration (FDA) declined to review its application for an experimental flu shot, CNBC reported.
   
• Mining firms rose this morning as silver and gold resumed their rallies.
   
• Crude oil (/CL) rose 1.5% on Middle East tension.
   
• Financial stocks dipped Tuesday as tech platform Altruist announced a new AI-powered tax planning tool, CNBC reported.
   
• Bitcoin (/BTC) slipped 2.5% early today and hovered just above $67,000.
   
• The dollar index slid Tuesday, staying under 97 after the yen rose following Japan's weekend election. China's currency also gained. Tuesday's poor U.S. retail sales report didn't help, and the greenback is under pressure from concerns that foreign countries might pull back purchases of U.S. assets.

Market breadth remains solid despite all the recent twists and turns, including rotation between cyclical and tech stocks. As of midday Tuesday, 69% of S&P 500 stocks (SPX—candlesticks) traded above their 50-day moving average. The last time the percentage fell below 50% (red line) was December 10. That's not the longest recent run above 50%, as one stretched from last May 7 to July 31. The SPX rose 12.6% over that period but is up just 1.2% since the new streak began December 10, underscoring how difficult it is for the index to advance without the help of big tech even as most stocks rise. Tech stocks rose 21.6% during last year's stretch versus falling 3.2% since December 10.

Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.

February 12: January existing home sales, and expected earnings from Anheuser-Busch (BUD), Applied Materials (AMAT), Arista Networks (ANET), Vertex Pharmaceuticals (VRTX), Brookfield (BN), Airbnb (ABNB), and Coinbase Global (COIN).
February 13: January CPI and January core CPI, and expected earnings from Enbridge (ENB) and Moderna (MRNA).
February 16: U.S. markets closed for President's Day.
February 17: Expected earnings from Medtronic (MDT), Constellation Energy (CEG), and Palo Alto Networks (PANW).
February 18: January housing starts and building permits, January industrial production, FOMC meeting minutes, and expected earnings from Analog Devices (ADI), Booking Holdings (BKNG), Carvana (CVNA), DoorDash (DASH), Occidental Petroleum (OXY), and eBay (EBAY).