Global Markets Rebound as Strong U.S. Jobs Data Temper Rate-Cut Expectations; Oil Firm, Dollar Softens

Index Update

U.S. equity futures edged 0.3% higher on Thursday, recovering after a volatile prior session as investors weighed signs of economic strength against the prospect of a more hawkish Federal Reserve stance. Dow futures hovered near record levels, while technology stocks showed mixed performance. AI infrastructure names extended gains, with Micron rising 4% on optimism around its HBM4 production and Equinix jumping 8% after beating guidance, whereas Cisco declined 4% on a weaker outlook. McDonald’s posted modest gains following its results. Strong jobs data reinforced hawkish Fed expectations, with markets now focused on upcoming January CPI data for further policy signals.

Market Movers

On Wednesday, the top gainers were Neo-Concept International Group Holdings Limited  (+238.46%), followed by SUNation Energy, Inc. (+42.28%). On the contrary, Upstream Bio, Inc. (-47.18%), and TG-17, Inc. (-44.58%) declined the most the same day.

Commodities Update

WTI and Brent crude futures rose toward $65 and $70 per barrel, respectively, hovering near five-month highs as markets focused on escalating U.S.–Iran tensions and potential supply risks. While diplomatic efforts signaled by President Trump offered some reassurance, concerns over possible military action supported prices. Gains were tempered by EIA data showing a sharp 8.5 million-barrel increase in U.S. crude inventories, the highest since late June. OPEC left its medium-term demand growth forecasts unchanged, and investors awaited the IEA’s monthly report, which could again point to a potential global supply surplus.

Gold slipped to around $5,050 per ounce and silver fell more than 1% toward $83 per ounce on Thursday, as stronger-than-expected U.S. jobs data reduced expectations for near-term Federal Reserve rate cuts. January nonfarm payrolls rose by 130,000—more than double forecasts—while the unemployment rate edged down to 4.3%, underscoring labor market resilience and prompting markets to shift expectations for the next rate cut from June to July. Higher Treasury yields weighed on precious metals, though prices remained supported by ongoing central bank buying, geopolitical uncertainties, and safe-haven demand linked to currency and debt concerns.

Macro Updates

US Jobless Claims Edge Lower but Remain Elevated

Initial jobless claims in the U.S. declined by 5,000 to 227,000 in early February, slightly above market expectations and close to an eight-week high following an upward revision in the prior week. Continuing claims increased by 21,000 to 1.862 million in January, reversing a mid-month drop to the lowest level since September 2024. The uptick was largely attributed to business disruptions caused by widespread winter storms. Meanwhile, claims filed by federal employees rose modestly by 47 to 615, as markets continued to monitor the effects of the government shutdown.

Dollar Weakens Despite Strong US Jobs Data

The U.S. dollar index slipped to around 96.8 amid heightened volatility, even after stronger-than-expected January jobs data reduced expectations for near-term Federal Reserve rate cuts. Payrolls rose by 130,000 and the unemployment rate fell to 4.3%, reinforcing a cautious Fed stance and pushing Treasury yields higher, with markets now pricing the next rate cut in July rather than June. However, the dollar remained under pressure due to a strengthening Japanese yen, supported by renewed official interventions and optimism over Japan’s expansionary fiscal policies.

Bonds Commentary

The U.S. 10-year Treasury yield held near 4.18% on Thursday, maintaining its rebound after stronger-than-expected January jobs data reduced expectations for near-term Federal Reserve rate cuts. Payrolls increased by 130,000 and the unemployment rate fell to 4.3%, reinforcing the Fed’s cautious stance and shifting market expectations for the next rate cut from June to July. Investors now await the January CPI report for further guidance on inflation, while still pricing in about 50 basis points of easing by year-end.

Futures Update

U.S. stock futures advanced on Thursday, recovering from the prior session’s decline as investors turned their attention to a new wave of corporate earnings and forthcoming inflation figures. Dow Jones futures were up 155 points, or 0.3%, while S&P 500 and Nasdaq 100 futures also gained 0.3%, rising 19 points and 60 points, respectively.

After failing to sustain its initial upward move, the stocks quickly pulled back in early trading on Wednesday and lacked clear direction for the rest of the day. The S&P 500 declined by less than a tenth of a percent, or 0.01%, closing at 6,941.46. From a technical perspective, the index is trading near key resistance levels and may continue to fluctuate within a range today with a bearish bias. The 14-day Relative Strength Index (RSI) is close to its midpoint, indicating indecision at current levels. Key support is identified around 6,860, which could trigger a rebound, while resistance is near 6,990.