US jobs figures reshape market outlook

The US unemployment rate has tempered expectations of Federal Reserve (Fed) rate cuts. The Bureau of Labor Statistics report – originally scheduled for last week but delayed due to a brief US government shutdown – pointed to resilient labour market conditions, with payrolls exceeding forecasts and unemployment edging lower than anticipated, declining to 4.30% in January 2026 from 4.40% the previous month, ahead of expectations of 4.40% and highlighting labour market resilience.  

Jobs data dropped by 141 000 to 7.36 million, as total employment climbed 528 000 to 164.52 million. Employment growth centred on healthcare, social assistance and construction, offset by payroll losses in Federal Government and financial services. 

US share indices recovered on a volatile Wednesday, buoyed by solid economic data despite concerns over tighter monetary policy and artificial intelligence (AI)-related shifts. The S&P 500 and Nasdaq 100 each advanced 0.30%, while the Dow notched a fresh record past 50 200. AI infrastructure names rallied, with Micron, Texas Instruments and Lam Research each surging over 5%. Software firms faced renewed selling pressure amid fears of AI-driven displacement; Salesforce, ServiceNow and Intuit shed more than 5%, while Oracle and Palantir declined over 2%. T-Mobile fell 5% on weaker-than-expected subscriber gains, and Humana slipped 1% post-earnings.

European stock markets ended with modest movements for the second straight session, as mixed corporate results played out against rising EU borrowing costs spurred by US jobs figures. The Eurozone's STOXX 50 dipped 0.20% to 6 040, while the broader STOXX 600 edged up 0.20% to a new high of 622. Siemens Energy surged 8.50% after net profits almost tripled; Ferrari climbed over 4% to build on Tuesday's 10% rally amid brighter guidance prospects; and Ahold Delhaize vaulted more than 10% on stronger-than-forecast US operations. Commerzbank slipped 2% despite lifting its full-year profit outlook, while SAP fell 4% echoing US software weakness on mounting AI disruption fears.

Frankfurt's DAX 40 declined around 0.50% to 24 856, pressured by resurgent AI concerns and patchy earnings. London's FTSE 100 bucked the trend, soaring over 1% to a record near 10 480, driven by miners, oil giants and housebuilders. Commodity plays dominated, with Shell up 3%, BP ahead more than 5%, Antofagasta gaining nearly 6%, Rio Tinto around 3%, and Anglo American over 2%; precious metals miners Fresnillo and Endeavour added 3.10% and 2.70%, respectively.

Turning to commodities, silver climbed over 4% to around $84.20 per ounce on Wednesday, trimming some advances as sturdy US employment figures shifted market outlooks, while gold steadied near $5 082 per ounce after easing from earlier highs. 

Brent crude futures advanced close to 1% to $69.37 per barrel, nearing the September 2025 peak, amid escalating Middle East strains. Reports indicated Washington might intercept tankers hauling Iranian oil and could send an extra carrier strike group should talks on Iran’s nuclear programme falter. Although initial discussions last week showed promise, traders worry that stalled negotiations could spark US action against Tehran, threatening Iranian exports or inviting reprisals.

Despite bouts of global market volatility, Asia’s outlook remains supported by favourable structural and macroeconomic tailwinds. Major technology firms continue to strengthen their positions within the AI value chain, while countries such as South Korea and Japan press ahead with shareholder-friendly reforms. Improved sentiment lifted regional markets, with Japan’s Nikkei jumping more than 2%, while the Shanghai Composite edged up 0.10% and Hong Kong’s Hang Seng closed 0.19% higher.

The positive tone extended to local markets. South African equities advanced, with the JSE All Share Index (ALSI) rising 0.72% to close at 121 752.86. Resource counters led the gains, as the Resource 10 surged 2.48% and the Metals and Mining Index climbed 2.42%. The rand strengthened against the US dollar to trade at R15.88 at 22h00 SAST, while also firming against the pound and the euro.