The three major indices closed slightly lower, Micron Technology (MU.US) rose nearly 10%

Wednesday, the three major indices closed slightly lower. U.S. non-farm payrolls increased by 130,000 jobs in January, far exceeding expectations. The unemployment rate dropped to 4.3%. The strong non-farm employment data reduced the likelihood that the Federal Reserve will need to cut interest rates again before mid-year.

【U.S. Stocks】At the close, the Dow Jones Industrial Average fell 66.74 points, or 0.13%, to 50,121.40; the Nasdaq fell 36.01 points, or 0.16%, to 23,066.47; the S&P 500 declined 0.34 points, or 0.01%, to 6,941.45. Microsoft (MSFT.US) and Google (GOOG.US) both fell 2%, Nvidia (NVDA.US) and Apple (AAPL.US) rose less than 1%, Micron Technology (MU.US) surged nearly 10%. The Nasdaq China Golden Dragon Index closed down 0.65%, with Kingsoft Cloud (KC.US) up 10%.

【European Stocks】Germany’s DAX 30 index fell 125.04 points, or 0.50%, to 24,860.78; the UK FTSE 100 rose 112.46 points, or 1.09%, to 10,466.30; France’s CAC 40 declined 14.64 points, or 0.18%, to 8,313.24; the Euro Stoxx 50 fell 9.51 points, or 0.16%, to 6,037.55; Spain’s IBEX 35 dropped 91.45 points, or 0.50%, to 18,026.15; Italy’s FTSE MIB decreased 317.49 points, or 0.68%, to 46,485.50.

【Cryptocurrency】Bitcoin fell nearly 1.7%, trading at $67,701; Ethereum dropped over 3%, trading at $1,961.

【U.S. Dollar Index】The dollar index, which measures the dollar against six major currencies, rose 0.04% today, closing at 96.834. At the New York close, 1 euro exchanged for 1.1882 USD, below the previous day’s 1.1894 USD; 1 British pound exchanged for 1.3637 USD, below the previous day’s 1.3666 USD. 1 USD exchanged for 152.83 Japanese yen, below the previous day’s 154.49 yen; 1 USD exchanged for 0.7703 Swiss francs, above the previous day’s 0.7682; 1 USD exchanged for 1.3561 Canadian dollars, above the previous day’s 1.3551; 1 USD exchanged for 8.8813 Swedish kronor, below the previous day’s 8.9021.

【Precious Metals】Spot gold rose 1.18%, to $5,082.47; spot silver was at $84.241 per ounce.

【Crude Oil】Light crude oil futures for March delivery on the NYMEX rose 67 cents, closing at $64.63 per barrel, up 1.05%; Brent crude oil futures for April delivery in London rose 60 cents, closing at $69.40 per barrel, up 0.87%.

【Macro News】

The stabilization of the U.S. labor market may leave room for the Fed to hold steady. Media reports on the non-farm payrolls indicate that U.S. employment growth accelerated in January, with 130,000 new jobs far exceeding expectations, and the unemployment rate dropped to 4.3%. This signals a stabilizing labor market, possibly allowing the Fed to keep rates unchanged for a period while monitoring inflation. The better-than-expected job growth partly reflects fewer seasonal workers hired by retailers and courier companies last holiday season. January is typically the month with the most holiday-related layoffs. Due to sluggish seasonal hiring, layoffs may also be smaller, boosting employment growth. Despite the increase in non-farm jobs, the labor market remains lukewarm, struggling even amid strong economic growth. Concerns over employment and high inflation have eroded Americans’ satisfaction with Trump’s economic policies.

Rising tariff revenues help reduce U.S. deficit; Supreme Court ruling becomes a key future variable. Data shows that in the first four months of this year, the U.S. budget deficit shrank from $840 billion last year to $697 billion, a 17% decrease. The Supreme Court is currently weighing whether Trump has the authority to impose most tariffs, and the deficit reduction highlights the significant impact of this ruling on government interests. Revenue grew faster than spending, with total income up 12% and expenditures up only 2%. From October last year to January this year, tariff revenue totaled $124 billion, a roughly 304% increase from the same period in 2025. Earlier Wednesday, the Congressional Budget Office estimated that if tariffs registered by November 20 remain unchanged over the next decade, tariff revenues could reduce the federal deficit by $3 trillion. However, this is not enough to offset other deficit-increasing aspects of Trump’s economic plan. The CBO raised its ten-year total deficit forecast by $1.4 trillion.

The Fed will abandon some previous requirements for bank repair. Sources say the Fed has signaled to the banking industry that it plans to drop some of the corrective warnings previously issued to certain institutions. This move comes as Vice Chair Bowman continues to relax regulations on U.S. financial institutions. Earlier this month, Fed regulators informed banks that they would begin assessing unresolved warning issues. These warnings are private directives requiring banks to fix operational deficiencies. Sources say that if these warnings do not align with the Fed’s recent guidance—focusing more on immediate financial health risks rather than procedural issues—they will be canceled. The Fed’s action targets so-called “concerns” and “urgent concerns,” the latter usually requiring swift action. These directives may involve multiple aspects of bank operations, including financial condition, cybersecurity preparedness, or succession planning. Sources say the Fed will still issue related instructions during routine inspections, but the threshold for triggering them will be higher.

The Bank of Canada’s meeting minutes directly warn that U.S. policies increase uncertainty and risk to trade and independence. The Bank of Canada states that recent U.S. actions in trade, diplomacy, and central bank independence are making the global environment more turbulent and increasing uncertainty. In January 2026, the bank kept rates at 2.25% for the second consecutive time, with officials citing rising uncertainty making it difficult to determine whether to raise or cut rates next. The minutes reiterate, “It is difficult to predict the timing and direction of the next policy rate change.” The governing council explicitly pointed to the U.S. as the main source of instability, though it did not directly name Trump. The minutes cite examples of Trump’s international and trade policies as sources of turbulence, marking the first time Trump’s attacks on the Fed have been included in internal discussions. The minutes state, “Recent geopolitical events—including in Venezuela, Iran, Greenland, and threats to the Fed’s independence—have made the world more turbulent,” and “U.S. trade policy is increasingly used for geopolitical purposes rather than economic ones, making it more unpredictable.”

【Stock News】

Bill Ackman’s hedge fund, Pershing Square, disclosed a new $2 billion position in Meta at the end of last year. During a Wednesday annual meeting, Pershing Square revealed it had built a new position in Meta Platforms (META.US), accounting for 10% of the firm’s capital as of the end of 2025, roughly $2 billion based on previously disclosed data. Over the past six months, Meta’s stock has fallen about 13%, and Pershing Square believes the decline is due to investor concerns over the company’s massive investments in AI. The fund’s investment thesis partly hinges on the belief that AI will enhance Meta’s content recommendation and personalized advertising capabilities, and could open new opportunities in wearable devices or enterprise AI assistants. Pershing Square stated, “Meta’s business model is one of the most directly benefiting from AI integration.” According to presentation materials, the fund started building its position in November, with an average cost of $625 per share. Since then, Meta’s stock has risen 11% through the end of 2025, and another 3% in early 2026.

McDonald’s US sales growth hits two-year high, value pricing as core driver. Thanks to ongoing value meal promotions resonating with cost-conscious diners, McDonald’s (MCD.US) posted its fastest quarterly sales growth in over two years in Q4. U.S. same-store sales increased 6.8% year-over-year, beating expectations and reaching the highest level since 2023. The results indicate that efforts such as launching more affordable items and $5 value meals are paying off, helping the fast-food giant outperform competitors. CEO Chris Kempczinski stated in a Wednesday release that focus on affordability helped improve customer traffic in Q4. The company also noted that “successful marketing campaigns” contributed to increased average spending per customer in the U.S.

AI infrastructure demand explodes; Cisco raises earnings outlook. Cisco (CSCO.US), the world’s largest manufacturer of networking and internet equipment, issued an optimistic forecast for the current quarter, indicating it is attracting many clients building AI systems. The company stated that for the quarter ending in April, revenue is expected to reach $15.4 to $15.6 billion, surpassing Wall Street’s average estimate of $15.2 billion. Cisco has been adjusting its chips and network gear to handle the massive data loads required by AI data centers. Analyst Woo Jin Ho said, “AI remains a strong driver of sales growth. Large data center operators continue to expand AI infrastructure deployment, fueling demand for higher-capacity networks.” Last year, Cisco’s stock rose 30%.