Wall Street Gets Mixed Bag of Earnings Before Jobs: Markets Wrap

(Bloomberg) — A relative sense of caution prevailed on Wall Street as traders parsed a deluge of corporate earnings ahead of Amazon.com Inc.’s results and Friday’s jobs data — which will be released alongside revisions.

Stocks edged up, but struggled to gain a whole lot of traction. Disappointing figures from cloud-computing giants suggest reasons to be cautious about Amazon Web Services, the biggest player in the space. Qualcomm Inc. sank on fears that 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.

Just 24 hours ahead of the US payrolls report, data showed initial jobless claims picked up, but remained relatively subdued. Separate figures showed labor productivity rose. In addition to the employment report on 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, especially with Amazon earnings due out after today’s close.”

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 0.2%. The Nasdaq 100 was little changed. The Dow Jones Industrial Average fell 0.3%. A gauge of the “Magnificent Seven” megacaps wavered. The Russell 2000 dropped 0.1%.

The yield on 10-year Treasuries advanced four basis points to 4.46%. The Bloomberg Dollar Spot Index rose 0.1%. The British pound fell 0.6%. Bank of England officials decided to cut rates to a 19-month low, with two supporting a bumper 50-basis-point cut, prompting markets to boost bets on further easing.

“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 backward-looking adjustments to the data 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 170,000 last month after advances in excess of 200,000 in the prior two months — which partly reflected recovery from two severe hurricanes. 

“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.

Meantime, Treasury Secretary Scott Bessent said the Trump administration’s focus with regard to bringing down borrowing costs is 10-year Treasury yields, rather than the Federal Reserve’s benchmark short-term interest rate.

“He and I are focused on the 10-year Treasury,” Bessent said in an interview with Fox Business Wednesday when asked about whether President Donald Trump wants lower interest rates. “He is not calling for the Fed to lower rates.”

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.
• Roblox Corp. tumbled after the video-game platform reported daily active users for the fourth quarter that fell short of analysts’ estimates.
• 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.
• Arm Holdings Plc gave a cautious revenue forecast for the current period, adding to recent concern that spending on artificial intelligence computing is slowing.
• 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.
• 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. climbed after sales surpassed expectations, buoyed by growth at the Taco Bell fast-food chain.
• Hershey Co. rose after the company reported higher-than-expected sales for the fourth quarter.
• MetLife Inc. expects a 70% jump in profit from private equity and real estate investments in 2025, after falling short of its own targets in recent years.
• Salesforce Inc. named Robin Washington, a technology industry veteran who has been on Salesforce’s board since 2013, to a newly created role of chief financial and operations officer.
• Paysafe Ltd., the online payments firm that went public through a merger with a blank-check company led by Bill Foley, is exploring a sale after receiving takeover interest, people familiar with the matter said.

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 0.2% as of 12 p.m. New York time
• The Nasdaq 100 was little changed
• The Dow Jones Industrial Average fell 0.3%
• The Stoxx Europe 600 rose 1.2%
• The MSCI World Index rose 0.3%
• Bloomberg Magnificent 7 Total Return Index was little changed
• The Russell 2000 Index fell 0.1%

Currencies

• The Bloomberg Dollar Spot Index rose 0.1%
• The euro fell 0.3% to $1.0368
• The British pound fell 0.6% to $1.2435
• The Japanese yen rose 0.4% to 152.03 per dollar

Cryptocurrencies

• Bitcoin fell 0.4% to $96,557.84
• Ether fell 2.9% to $2,706.92

Bonds

• The yield on 10-year Treasuries advanced four basis points to 4.46%
• Germany’s 10-year yield advanced one basis point to 2.38%
• Britain’s 10-year yield advanced five basis points to 4.49%

Commodities

• West Texas Intermediate crude rose 0.2% to $71.17 a barrel
• Spot gold fell 0.6% to $2,849.58 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.