Improved jobs picture fails to impress stock market as non-AI tech flails

💡 DMK Insight

US jobs data looks solid, but stocks aren’t buying it—and here’s why that matters: The January Nonfarm Payrolls came in at 130K, significantly above the 70K consensus, suggesting a robust labor market. However, the quick retreat of US equities from their initial gains signals skepticism among traders. This disconnect could stem from concerns about inflation and the Fed’s potential response. If the jobs market continues to strengthen, it might push the Fed towards more aggressive rate hikes, which could weigh on stock valuations. Traders should keep an eye on the S&P 500’s resistance levels around recent highs; a failure to break through could indicate a bearish trend. On the flip side, this could create opportunities in sectors that typically benefit from a strong labor market, like consumer discretionary. Watch for any shifts in sentiment as earnings reports roll in, as they might provide clues on how companies are navigating this environment. The key here is to monitor how the market reacts in the coming days—if stocks continue to falter despite strong economic data, it could signal deeper issues ahead.