U.S. stock futures were trading higher early Wednesday, pointing to a positive start on Wall Street after a muted and directionless session the day before.
The move comes in response to fresh data from the Labor Department showing that job growth in January significantly outpaced expectations.
Nonfarm payrolls increased by 130,000 last month, following a downward revision to December’s figure, which now shows a gain of 48,000 jobs.
Forecasters had anticipated an increase of 70,000 positions, compared with the originally reported 50,000 for December.
Meanwhile, the unemployment rate ticked down to 4.3% from 4.4%, defying expectations that it would remain unchanged.
The stronger-than-expected employment figures may boost confidence in the resilience of the U.S. economy, though they could also dampen hopes for imminent interest rate cuts by the Federal Reserve.
Attention now turns to Friday’s release of consumer price index data, which may provide further insight into the direction of monetary policy.
On Tuesday, markets struggled to gain traction after two prior days of gains. The Dow Jones Industrial Average briefly touched a new intraday record, but broader indices failed to build sustained momentum.
At the close, the Dow rose 52.27 points, or 0.1%, to 50,188.13. In contrast, the S&P 500 declined 23.01 points, or 0.3%, to 6,941.81, and the Nasdaq Composite fell 136.20 points, or 0.6%, to 23,102.47.
The lack of conviction reflected investor caution ahead of the monthly jobs release.
Traders also largely dismissed a Commerce Department report showing retail sales were unexpectedly flat in December.
Retail activity showed virtually no change after a 0.6% increase in November, missing projections for a 0.4% gain.
Excluding motor vehicles and parts, sales were similarly stagnant following a 0.4% rise the previous month. Economists had looked for a 0.3% increase.
“The December retail sales report shows that consumers paused their spending at the end of the holiday season after a strong spending spree in October and November,” said Nationwide Chief Economist Kathy Bostjancic.
She added, “The stagnant retail sales in December provides a soft hand-off to Q1 consumer spending, but we look for a surge in tax refunds, estimated to be $50 billion higher than last year, and the still strong wealth effect will buoy consumer spending in Q1 and support solid GDP growth.”
In separate data, import prices edged higher in December, in line with market expectations.
Housing-related stocks led gains as Treasury yields declined, pushing the Philadelphia Housing Sector Index up 3.4% to its highest close in five months.
Other rate-sensitive sectors also advanced, with the Dow Jones Utility Average climbing 1.9% and the Dow Jones U.S. Real Estate Index rising 1.3%.
On the downside, brokerage shares retreated sharply, sending the NYSE Arca Broker/Dealer Index down 2.5% after reaching a record high in the prior session.
Technology hardware, airline, and oil services stocks also posted notable losses during the day.
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