U.S. stocks closed slightly weaker on Wednesday, with the Dow Jones Industrial Average snapping a three-day winning streak. The Dow fell 66 points, or 0.13 per cent, to 50,121. The S&P 500 was little changed at 6,941, while the Nasdaq Composite slipped 0.16 per cent to 23,066.
Markets initially rallied after the January employment report, but gains faded as investors reassessed the implications for interest rates.
Jobs growth beats forecasts
Data from the Bureau of Labor Statistics showed nonfarm payrolls rose by 130,000 in January, well above expectations for a 55,000 increase. December’s figure was revised down to 48,000. The unemployment rate edged down to 4.3 per cent, below forecasts of 4.4 per cent.
Despite the headline strength, hiring was heavily concentrated in health care, which accounted for 124,000 new positions. Broader labour market momentum remains subdued, with average monthly job gains last year running at just 15,000 after benchmark revisions.
Treasury yields rose immediately after the data, reflecting reduced expectations of near-term interest rate cuts from the Federal Reserve. At session highs, the Dow was up more than 300 points before reversing course.
Sector rotation continues
Technology shares remained under pressure, particularly in software. Salesforce fell 4 per cent and ServiceNow dropped 5 per cent. The iShares Expanded Tech-Software Sector ETF declined more than 2 per cent and remains nearly 30 per cent below its 52-week high.
By contrast, companies tied to economic acceleration and artificial intelligence infrastructure outperformed. Digital infrastructure provider Vertiv surged 24 per cent after reporting stronger-than-expected fourth-quarter earnings and issuing a robust 2026 outlook. Industrial names including Caterpillar, GE Vernova and Eaton also finished higher.
Australian sharemarket outlook
Australian shares are poised for a flat start, with S&P/ASX 200 futures down 2 points, or 0.02 per cent, to 8,956.
Earnings remain the key driver locally. ANZ Group Holdings reported a cash profit of $1.94bn for the latest quarter, up 17 per cent on the average of the previous two quarters, supported by cost reductions.
Meanwhile, Insurance Australia Group posted a 54 per cent fall in half-year profit to $505m. The result included a $174m one-off impact related to severe seasonal weather following its RACQI acquisition.
Investors are also preparing for a busy slate of results on Thursday. Companies scheduled to report include AMP Limited, ASX Limited, Breville Group, Charter Hall Long WALE REIT, Pro Medicus, South32, Temple & Webster, Paladin Energy, Origin Energy, Orora and Northern Star Resources.
