Wall Street ends muted after strong jobs data lowers rate cut bets

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Thu, February 12, 2026 at 8:26 AM GMT+9

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STORY: US stocks were muted on Wednesday, with the Dow ticking down slightly, the S&P 500 unchanged and the Nasdaq nudging lower.The indexes had started the session on a strong note, with the S&P 500 and Nasdaq hitting their highest level in more than a week after the closely-watched nonfarm payrolls report showed much faster than expected job growth in January, while the unemployment rate fell to 4.3%.But the gains subsided as traders dialed back bets on interest rate cuts from the Federal Reserve, explains Alexander Morris, CEO and Chief Investment Officer at F/m Investments.“Looking backwards, this is a certain marked improvement versus where we were, and this certainly caught economists who were being surveyed by surprise. In general, though, we do know the labor market has overall softened. So one really strong report is just one really strong report. This has been delayed, and it has some question as to whether or not all of the data was collected in all the usual ways. So I think this is a great sign for the economy, not a great sign if you were hoping for three or more rate cuts to come in future.”Investors will now be laser-focused on the January Consumer Price Index inflation report, due on Friday.Among Wednesday’s stock moves, technology was a mixed bag, with chip stocks rallying sharply and software stocks tumbling to snap three sessions of gains after last week’s steep selloff sparked by fears of AI-fueled disruption. Microsoft lost more than 2% and was the biggest drag on the S&P 500, followed by Alphabet, which shed almost 2.5%.Leading declines in the financial services sector, shares of Robinhood tumbled nearly 9%, after the retail brokerage missed fourth-quarter revenue expectations.And shares of power equipment maker Generac rallied about 18%, making it the S&P 500’s biggest percentage gainer, despite missing fourth-quarter profit and sales expectations. But the company said demand from data-center customers continues to strengthen, with rising orders from hyperscalers expected to lift Generac’s backlog in the coming quarters.

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