Oops, the US jobs data released yesterday was too strong to cheer for investors. The report printed 130K new nonfarm jobs last month — roughly double expectations — the unemployment rate ticked lower and average hourly earnings came in higher than expected, remaining steady at 3.7% after earlier months were revised down. The data immediately hit Federal Reserve (Fed) cut expectations, suggesting that such strong job gains could give the Fed more time before lowering rates. In the aftermath, Fed funds futures price in no more than a 21% chance for an April cut, and less than 60% for June. That hurts.
The US 2-year yield, which captures Fed rate bets, rebounded to 3.55% and is consolidating near 3.50% this morning. The US dollar recovered early weakness but could not reverse early-week losses, while US equity indices fell on waning Fed cut expectations, and Bitcoin extended losses below the $70K mark. In short, yesterday’s “good news” from the jobs report was clearly interpreted as bad news by the markets — a classic market reaction.
But if you dig a little deeper, most job gains came from healthcare, social assistance and construction, while other sectors — like federal government and financials — reported job losses. So, the uneven jobs growth may not signal broad improvement.
More importantly, the BLS’ seasonal adjustments and modeling may have overstated underlying job growth, and that true growth may be closer to ~40–50K rather than 130K, it is said…
Looking further, the US labour market was far weaker in 2025 than the monthly headlines suggested. After the BLS benchmark revision, the economy added roughly 181K jobs for the entire year, about 15K per month on average — one of the weakest annual gains outside recession years since the early 2000s. The White House’s immigration policies is certainly to blame.
So the knee-jerk market reaction was decisively hawkish, but the headline numbers hid some underlying weakness. That may explain why yields and the dollar have returned to pre-data levels. Investors now turn to the next important release: the US CPI update due Friday, expected at 2.5%, which could revive Fed doves and offer hope for a few rate cuts this year to support the stock rally.
In equities, major US indices were marginally down across small, mid and large caps.
The selloff in global software stocks continued, with St. James’s Place losing more than 13% in London and Dassault Systems down more than 20% in Paris after weak results. The iShares Software ETF fell another 2.5% in the U.S. Meanwhile, real estate stocks joined the AI panic room, despite no major headlines triggering the drop — just a few analysts warning that AI could negatively impact jobs and, eventually, commercial real estate demand.
My take: this AI anxiety is getting out of control, and the resulting selloff may create interesting opportunities. The world won’t collapse tomorrow, and humans won’t all be replaced by robots. If so, who cares about business anyway? Robots will have to.
Keep calm, take a deep breath, and look for opportunities.
In FX, the USD/JPY rose for the fourth consecutive session, but yen bulls are losing strength near the 152 Fibonacci support, which could mark the end of the yen’s medium-term weakness. That would be a meaningful reversal and a relief for policymakers, as rapid yen depreciation raises imported inflation concerns and complicates Bank of Japan (BoJ) policy. The Nikkei is down this morning, following US peers. Historically, the Nikkei is negatively correlated with the yen, but that correlation could weaken if yen strength encourages a more patient BoJ and softer policy normalization.
Elsewhere, US crude is doing great since the start of the year. The barrel of US crude is flirting with levels above $65pn and is building a support above a key Fibonacci level – the major 38.2% retracement on a decline during the second half of last year. The question is, whether the past two month’s rebound could lead to a sustainable bullish trend. The soft US dollar is supportive, the ample global supply is challenging. Geopolitical headlines could be noisy. A part of the latest bullish push in oil prices was explained by the tense relations between US and Iran. What will be decisive is what happens when the latter tensions will ease. Holding support above the critical $64pb level should keep US crude in the positive consolidation zone and encourage further gains. A return below this level will however throw the market back to the bearish price narrative.
The energy sector is benefiting from this momentum and may hold gains in a rotation trade even if oil prices pause.
 cut expectations, suggesting that such strong job gains could give the Fed more time before lowering rates. In the aftermath, Fed funds futures price in no more than a 21% chance for an April cut, and less than 60% for June. That hurts.){kind=link}