Wall Street Wobbles as Jobs Report Misses Expectations, Amazon Leads Tech Sell-Off

Key Highlights:

• S&P 500 falls 0.1%, Nasdaq drops 0.5%, Dow Jones dips 0.1% after mixed economic data.
• Amazon (AMZN) plunges 3.84%, dragging tech lower on weak revenue outlook.
• US adds 143,000 jobs in January, missing expectations but showing labor market resilience.
• Treasury yields rise to 4.49%, signaling concerns about Federal Reserve rate cuts.
• Trump’s tariff push and tax reforms add uncertainty to investor sentiment.

Wall Street Struggles as Jobs Data and Tech Earnings Weigh on Markets

US stocks closed lower on February 7, 2025, as a weaker-than-expected January jobs report and disappointing earnings from Amazon (AMZN) overshadowed market optimism. The S&P 500 declined 0.1%, the tech-heavy Nasdaq Composite lost 0.5%, and the Dow Jones Industrial Average dropped 0.1%.

The latest jobs report, which showed 143,000 new jobs added in January, fell short of the expected 173,000, though wages grew and unemployment dipped to 4.0%. Meanwhile, Amazon’s stock fell 3.84%, joining Google (GOOG) and AMD (AMD) in a tech sector pullback amid concerns over AI-related spending.

Stock Market Overview

Figure: US stock market performance on February 7, 2025.

Amazon Leads Tech Declines as AI Spending Weighs on Growth

Amazon (AMZN) stock dropped 3.84%, following weaker-than-expected revenue guidance. The company joined Google (GOOG) and AMD (AMD) in reporting higher AI development costs, sparking investor concerns about the profitability of artificial intelligence investments.

Despite strong growth in cloud computing and retail, Amazon’s warning of ‘lumpy’ cloud revenue growth raised red flags on Wall Street. The stock’s decline mirrored similar pullbacks in AI-heavy companies.

Biggest Stock Movers

Top Gainers:

• ExxonMobil (XOM): +2.1% as oil prices rebounded.
• Coca-Cola (KO): +1.4% after stronger-than-expected earnings.
• Procter & Gamble (PG): +1.2% on solid consumer spending.

Biggest Decliners:

• Amazon (AMZN): -3.84% after weak revenue guidance.
• AMD (AMD): -3.2%, as concerns over AI-related costs mounted.
• Tesla (TSLA): -2.8%, following a weaker China sales report.

Jobs Report Misses Expectations, But Wage Growth Offers Hope

The US economy added 143,000 jobs in January, below the 173,000 forecast by economists. However, average hourly wages increased by 0.4%, suggesting the labor market remains resilient despite slower hiring.

The unemployment rate fell to 4.0%, from 4.1% in December, signaling continued economic strength. December’s job numbers were also revised up significantly, from 256,000 to 307,000, highlighting a stronger-than-expected labor market at year-end.

Key Employment Data

📊 Figure: US labor market data comparison (Jan vs. Dec).

Despite the weaker-than-expected job growth, the Federal Reserve is unlikely to cut rates before June, as the labor market remains strong enough to delay monetary easing.

Treasury Yields Rise Amid Inflation and Interest Rate Uncertainty

The 10-year Treasury yield climbed to 4.49%, reflecting investor caution over future rate cuts. Higher yields typically indicate lower equity valuations, contributing to the day’s stock market weakness.

Federal Reserve officials have signaled that interest rate cuts may not come before June, as inflation pressures persist. Investors are closely watching upcoming inflation reports and Fed meetings for clearer guidance.

Global Markets: Europe and Asia Show Mixed Performance

While US stocks struggled, European equities continued their winning streak, with the Stoxx 600 closing near record highs. The index is on track for its seventh consecutive weekly gain.

Meanwhile, Asian markets showed mixed performance:

• Hang Seng Index +1.43%, lifted by Chinese economic stimulus.
• Nikkei 225 +0.75%, driven by strong tech earnings.
• FTSE 100 -0.30%, as the Bank of England’s rate cut weighed on sentiment.

Market Outlook: What’s Next for Investors?

Looking ahead, investors remain cautiously optimistic as they watch for key economic data and earnings reports in the coming weeks.

Key Factors to Watch:

✅ Inflation Reports – Will inflation remain elevated, delaying Fed rate cuts?
✅ Earnings Season – Can Big Tech recover from recent pullbacks?
✅ Tariff Developments – Will Trump’s proposed hedge fund tax reforms impact markets?

Despite near-term volatility, markets remain on track for small weekly gains, indicating that investor sentiment is holding steady.

Final Thoughts:

The US stock market ended the day on a mixed note, as a weak jobs report, rising Treasury yields, and Amazon’s disappointing earnings weighed on investor sentiment.

🔹 Nasdaq saw the biggest loss (-0.5%), led by Amazon and AI-related stocks.
🔹 The S&P 500 and Dow Jones posted minor declines (-0.1%), reflecting broader market uncertainty.
🔹 Treasury yields climbed to 4.49%, delaying expectations for Federal Reserve rate cuts.

While economic data suggests resilience, investors remain cautious amid inflation worries and geopolitical risks.