Stocks Up Before Jobs as Amazon Hit in Late Hours: Markets Wrap

(Bloomberg) — Stocks eked out gains as traders parsed mixed earnings ahead of jobs data. Bonds pared losses as Treasury Secretary Scott Bessent reiterated his view on a lower path for 10-year yields under the Trump administration.

Amazon.com Inc. tumbled in late hours after projecting profit that fell short of estimates, suggesting the company continues to ramp up spending to support artificial-intelligence services. In regular trading, Qualcomm Inc. sank on fears demand for new handsets will stall. A bullish outlook lifted Peloton Interactive Inc. while Philip Morris International Inc. hit a record high on solid sales of Zyn nicotine pouches. Ford Motor Co. sank amid a profit warning.

Bessent told Bloomberg he’d refrain from criticizing Federal Reserve Chair Jerome Powell and that the Trump administration is focused on policy moves that result in a lower yield on the 10-year bond, rather than the question of whether officials will deliver rate cuts. He also noted the US continues to have a “strong dollar” policy under President Donald Trump.

In the run-up to the US payrolls report, data showed initial jobless claims picked up, but remained subdued. Separate figures showed solid labor productivity. In addition to the employment print Friday, Wall Street will be closely watching a revision to job growth. Economists predict that will be substantial, but probably not as bad as initially estimated.

“So far, this week’s numbers have highlighted a labor market that doesn’t appear to be doing much hiring or firing,” said Chris Larkin at E*Trade from Morgan Stanley. “We’ll see if tomorrow’s monthly jobs report paints a similar picture. In the meantime, traders may be inclined to sit on their hands.”

The options market is betting the S&P 500 will move 0.9% in either direction after Friday’s US employment figures, data compiled by Piper Sandler show. That would be in-line with an average realized move of 0.9% on jobs day over the past 12 months.

The S&P 500 rose 0.4%. The Nasdaq 100 added 0.5%. The Dow Jones Industrial Average slid 0.3%. A gauge of the “Magnificent Seven” megacaps climbed 0.7%. The Russell 2000 dropped 0.4%.

The yield on 10-year Treasuries advanced two basis points to 4.44%. The Bloomberg Dollar Spot Index was little changed. The British pound fell 0.5%. Bank of England Governor Andrew Bailey cautioned markets against reading too much into how policymakers voted this month after a surprise switch by one official prompted investors to boost bets on more interest-rate reductions. 

“Fridays’ jobs report is important for markets because if it’s Goldilocks, it’s going to help support the market amidst all this tariff and policy noise,” said Tom Essaye at The Sevens Report. “However, if it’s not Goldilocks, it’s going to add another headwind on risk assets and likely pressure stocks.”

Every year, the January employment report from the Bureau of Labor Statistics comes with revisions for the 12 months through the previous March. Those adjustments traditionally don’t get much attention. But this week they will, because the agency’s preliminary estimate in August suggested the downward revision would be 818,000 — the largest since 2009.

Economists expect the actual markdown in the January report due Friday will probably come to around 600,000 to 700,000 jobs, which would be somewhat of a relief. The standard monthly jobs data is expected to show payrolls increased by 175,000 last month after advances in excess of 200,000 in the prior two months — which partly reflected recovery from two severe hurricanes. 

For Fed officials, the expected outcome of the January jobs report and the benchmark revisions will likely be consistent with their view that labor demand is moderating, though still strong enough to underpin the economy.

“As long as Friday’s jobs report shows that the economy added 170,000-200,000 jobs during the month, the market should largely absorb this number with little volatility,” said Gaurav Mallik at Pallas Capital Advisors. “If we see a number much stronger than this, it could remove the prospects of any rate cuts this year, and if it’s a number much lower, it could raise worries about a weakening labor market.”

A survey conducted by 22V Research shows only 24% of respondents think Friday’s data will be “risk-on.” Thirty percent said “risk-off” while 46% “mixed/negligible.”

“Investors have turned their focus to average hourly earnings this month after being far more focused on payrolls and the u-rate last month,” said Dennis DeBusschere at 22V.

To Matthew Weller at Forex.com and City Index, indeed one key area to watch will be the average hourly earnings measure, which has generally held steady in the 3.9%-4.0% range for the past five months.

“Any deviation from that zone could have downstream implications for inflation and Fed policy,” he said.

Powell said last week officials want to see more progress on inflation and would be looking for “serial readings” showing price pressures moving in the right direction.

For now, traders still see the Fed’s next move as a cut — although likely not until mid-year. Treasury yields hit 2025 lows this week.

“Over the short-term, lower 10-year Treasury yields should be a positive for US equities,” said Nicholas Colas at DataTrek Research. “We’ve come close to touching the proverbial third rail of 5% yields three times in the current bull market, and in the first two instances US equities performed well over the next few months of lower rates.”

Colas also noted that there now seems to be just enough concern about US economic growth to push rates lower without hurting equity valuations. And that would be a positive set-up for stocks.

The volatile start to the year has spooked some professional investors — but has done little to dowse retail traders’ enthusiasm for the US stock market and the so-called Magnificent Seven companies.

Mom-and-pop investor sentiment has reached the highest level on record, surpassing what was seen during the meme-stock mania in 2021, according to Emma Wu, JPMorgan’s global quantitative and derivatives strategist. Individual investor exposure to stocks is near the highest level its been since 1997, an analysis by Barclays’ global head of equities tactical strategies Alexander Altmann shows.

“While we emphasize the importance of portfolio diversification and hedging approaches to navigate policy uncertainty, we think there is more to go in equities,” said Solita Marcelli at UBS Global Wealth Management. “Our base case remains for the S&P 500 to rise to 6,600 by year-end, and we favor technology, financials, and utilities.” 

Corporate Highlights:

• Eli Lilly & Co.’s full-year earnings forecast came in line with analysts’ estimates as the company works to fix inventory problems with its new blockbuster obesity and diabetes drugs that weighed on sales in recent quarters.
• Honeywell International Inc. will split into separate publicly traded companies following pressure from an activist investor, the latest in a line of industrial conglomerates seeking a more streamlined portfolio.
• Bristol Myers Squibb Co. forecast 2025 sales and profit below Wall Street’s expectations — a sign that declining sales of older drugs will slow the company’s return to growth.
• Roblox Corp., a video-game platform, reported daily active users for the fourth quarter that fell short of analysts’ estimates.
• L’Oreal SA’s fourth-quarter sales fell short of analysts’ estimates after demand in the US failed to make up for a continued downturn in China.
• Tapestry Inc. raised its guidance again for the year on stronger-than-expected sales at its biggest brand Coach.
• Under Armour Inc. raised its annual profit guidance, signaling that its turnaround strategy is working.
• Yum! Brands Inc.’s sales surpassed expectations, buoyed by growth at the Taco Bell fast-food chain.
• Hershey Co. reported higher-than-expected sales for the fourth quarter.
• Bausch Health Companies Inc.’s years-long process of trying to separate its Bausch + Lomb Corp. eye-care business hit a roadblock Thursday when a potential sale to private equity fell through, raising questions about the parent company’s future.

Key events this week:

• US nonfarm payrolls, unemployment, University of Michigan consumer sentiment, Friday
• Fed’s Michelle Bowman, Adriana Kugler speak, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.4% as of 4 p.m. New York time
• The Nasdaq 100 rose 0.5%
• The Dow Jones Industrial Average fell 0.3%
• The MSCI World Index rose 0.4%
• Bloomberg Magnificent 7 Total Return Index rose 0.7%
• The Russell 2000 Index fell 0.4%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro fell 0.1% to $1.0389
• The British pound fell 0.5% to $1.2440
• The Japanese yen rose 0.7% to 151.52 per dollar

Cryptocurrencies

• Bitcoin was little changed at $96,890.48
• Ether fell 2.4% to $2,719.77

Bonds

• The yield on 10-year Treasuries advanced two basis points to 4.44%
• Germany’s 10-year yield advanced one basis point to 2.38%
• Britain’s 10-year yield advanced five basis points to 4.48%

Commodities

• West Texas Intermediate crude fell 0.6% to $70.59 a barrel
• Spot gold fell 0.4% to $2,856.48 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Robert Brand, Margaryta Kirakosian and Chiranjivi Chakraborty.

©2025 Bloomberg L.P.