Schwab Market Update
Stocks Down, Yields Up After Mostly Firm Jobs Data

Published as of: February 7, 2025, 9:15 a.m. ET
Listen to this article
Listen here or subscribe for free to the Schwab Market Update in your favorite podcast app.
The markets | Last price | Change | % change |
---|---|---|---|
S&P 500® index | 6,083.57 | +22.09 | +0.36% |
Dow Jones Industrial Average® | 44,747.63 | -125.65 | -0.28% |
Nasdaq Composite® | 19,791.99 | +99.66 | +0.51% |
10-year Treasury yield | 4.47% | +0.03 | -- |
U.S. Dollar Index | 107.80 | +0.11 | +0.10% |
Cboe Volatility Index® | 15.23 | -0.27 | -1.7% |
WTI Crude Oil | $71.05 | +0.44 | +0.62% |
Bitcoin | $98,189.03 | +1,511.83 | +1.56% |
Major index values are as of Thursday's close; others are as of 8:46 a.m. ET.
(Friday market open) January's U.S. jobs growth missed expectations at 143,000, but other metrics in today's nonfarm payrolls data firmed, including wages climbing 0.5% and unemployment falling to 4%. Analysts had expected 170,000 new jobs, unemployment of 4.1%, and hourly earnings growth of 0.3%. Treasury yields rose slightly after the data and stocks fell. "Despite a lot of noisiness, this was a relatively strong report," said Collin Martin, director, fixed income strategy at the Schwab Center for Financial Research. "Although the monthly gain was below expectations, the last two months were revised up by 100,000. This suggests that business hiring trends remain intact."
Jobs growth last month was the lowest since October and down sharply from December, but that might have reflected the Los Angeles wildfires and a freak January snowstorm in the Gulf states. The report upwardly revised October-through-December jobs growth by 100,000, meaning the labor market finished 2024 on a very strong note with 307,000 jobs added in December alone. Health care and retail trade were the leading growth categories in January, with little growth in closely watched construction and manufacturing. "Average hourly earnings came in a bit hot with a monthly gain of 0.5%, the highest since June 2023," Martin said. "Strong wage gains can help keep inflation sticky as consumer spending habits are maintained. The unemployment rate fell to its lowest level since last May. That's a good reading, but the data that feeds into the unemployment rate was a bit noisy in January given annual benchmark revisions. We expect the Fed to hold rates steady for the next few meetings, and this morning's data supports that case."
Beyond jobs, investors pored over Amazon's (AMZN) latest results as it became the sixth "Magnificent Seven" to report earnings late Thursday. Nvidia (NVDA) reports later this month. The S&P 500 Equal Weight Index (SPXEW), which weighs all stocks equally to blunt the market capitalization impact of the top handful like Nvidia, Tesla (TSLA) and Amazon, has been smoother than the S&P 500® index (SPX) lately, indicating elevated volatility among high market-cap names. "Technically, the longer-term uptrends are still intact, but ever since the December Fed meeting there has been a lot of sporadic, choppy price action across the majors," said Nathan Peterson, director of derivatives analysis at the Schwab Center for Financial Research.
To get the Schwab Market Update in your inbox every morning, subscribe on Schwab.com.
Three things to watch
- Amazon earnings assessed: Late Thursday, Amazon became the latest mega cap to deliver earnings that failed to inspire Wall Street. First quarter revenue guidance fell short of expectations and fourth quarter cloud growth disappointed. The company expects $151 billion to $151.55 billion in first quarter revenue, well below the FactSet consensus of $158.56 billion. Amazon's fourth quarter earnings per share easily beat Wall Street's estimates, and revenue slightly topped consensus. Amazon Web Services cloud revenue rose 19% year over year, matching the third quarter gain for that closely watched business segment, though some market participants had hoped for a sequential improvement. The company's first quarter revenue growth guidance reflects what Amazon called "an unusually large, unfavorable impact" from foreign exchange rates and a tough comparison to last year's first quarter that had an extra day due to the Leap Year. Amazon's miss on cloud revenue followed Alphabet's (GOOGL) slower-than-expected 30% quarterly cloud gains and disappointing Microsoft (MSFT) cloud growth, raising concerns about overall industry demand.
- Old school week: Next week's earnings schedule includes several well-known non-tech names: McDonald's (MCD), Coca Cola (KO), and Deere (DE). McDonald's gets the cooking underway early Monday after reporting "slightly negative comparable guest counts" at its U.S. stores in the third quarter, meaning less traffic at stores open at least 13 months. Results from McDonald's and Coca Cola follow PepsiCo (PEP) revenue earlier this week that missed analysts' estimates amid falling snack food demand. Shares of both Coca Cola and McDonald's are well off their 2024 highs, though Coca Cola had gained this year before PepsiCo's results. Last time out, Coca Cola surpassed analysts' revenue expectations, but that was due in part to higher prices, not improved demand. Case volume fell 1%. McDonald's, for its part, stressed affordability. Coca Cola, McDonald's, PepsiCo, General Mills (GIS), and other food firms face the challenge of obesity drugs tempering appetites. Eli Lilly (LLY) yesterday reported another huge quarter for its weight-loss drug.
- Breadth and earnings update: Heading into payrolls data, the near-term trading environment seemed cautiously optimistic, but there are signs of possible consolidation. Breadth has stabilized, with around 51% of S&P 500 stocks trading above their 50-day moving averages, near the middle of the recent range. "Magnificent Seven" stocks are down nearly 2% collectively since earnings season began, but advancers outnumber decliners this week for the major indexes, a sign of some broadening beyond the mega caps. So far, 60% of S&P 500 companies have reported, and 78% beat on earnings per share while 56% beat on sales, Bloomberg said.
On the move
- Amazon shares retreated 2.6% before the open after the company's revenue guidance disappointed and cloud growth fell short of expectations. Amazon's spending plans also might be pressuring shares, with the company expecting to spend $100 billion this year, mostly for AI-related investment focused on Amazon Web Services. On a positive note, ad revenue improved and Black Friday and Cyber Monday week sales broke records.
- Affirm Holdings (AFRM) climbed 13.6% in pre-market trading after the payment network beat analysts' quarterly revenue and earnings expectations.
- Chinese stocks climbed this week even as trade tensions rose. China's Shanghai Composite rose 1.6% and the Hang Seng Tech Index rose 1.8% on Friday, up 20% from its January low. Tech shares there have been climbing after the DeepSeek AI announcement raised hopes about China's AI space.
More insights from Schwab
Trade update: In her February Market Snapshot, Schwab Chief Investment Strategist Liz Ann Sonders notes that of the "Magnificent Seven," Tesla (TSLA) and Nvidia (NVDA) have the largest revenue exposure to China. "Bouts of volatility, weakness, and relief rallies are likely to persist," Sonders said. "It's a difficult market backdrop to navigate, so stay disciplined around long-term goals and strategies."

Navigating tariffs and inflation: Schwab's new On Investing podcast features an interview with Dr. Richard Clarida, PIMCO's global economic advisor and former vice chairman of the Board of Governors of the Federal Reserve. He discusses potential tariff impacts on inflation, among other topics.
Chart of the day

Data sources: S&P Dow Jones Indices. Chart source: thinkorswim® platform.
For illustrative purposes only. Past performance does not guarantee future results.
This three-month daily chart of the S&P 500 index (SPX-candlesticks) shows a couple of interesting trends. First, the 20-day moving average (red line) which fell below the 50-day moving average (blue line) last month in a move seen as technically bearish, rebounded to just above the 50-day moving average yesterday and both are near 6,000. Also, daily trading ranges have widened since the December 18 Fed meeting, which can be seen here as the large red candlestick. Average true range (ATR), which measures price volatility, has climbed from -43 on the SPX to 70. U.S. policy concerns and the DeepSeek AI news may help explain the larger recent daily moves.
The week ahead
Check out the Investors' Calendar for a summary of the top economic events and earnings reports on tap next week.
February 10: Expected earnings from McDonald's (MCD).
February 11: Expected earnings from Lyft (LYFT), Coca Cola (KO), and Humana (HUM).
February 12: January Consumer Price Index (CPI) and expected earnings from CVS Health (CVS) and Cisco (CSCO).
February 13: January Producer Price Index (PPI) and expected earnings from Deere (DE), Applied Materials (AMAT), Coinbase (COIN), and Roku (ROKU).
February 14: January retail sales and January industrial production.