S&P 500 steady as dollar firms, yen surges post-jobs

The S&P 500 held steady as firmer US jobs data pushed back near-term rate-cut bets, supporting the US dollar. The Japanese yen outperformed on political reassurance after Japan’s election. In Europe, the STOXX 600 closed at a record high, lifted by improving sentiment even as overall earnings expectations remain cautious. Markets now look to inflation for policy direction from the Federal Reserve.

Equities

The FTSE 100 closed at a fresh record on Wednesday, rising 1.1% to finish at 10,472, with gains concentrated in housebuilders and energy stocks. Buying interest gathered pace through the session after reports suggested the Labour government is considering a new version of the Help to Buy scheme to support demand for new homes. Vistry Group, Bellway and Persimmon all closed sharply higher on Wednesday, each rising by between about 4% and 5%, as investors focused on the potential impact on forward sales volumes. Energy stocks also lifted the index, with BP closing more than 5% higher and Shell ending the session almost 3% up, tracking firmer oil prices linked to US-Iran tensions and expectations of tighter supply.

The FTSE 250 slipped 0.2% by the close, weighed down by heavy losses in wealth managers. St. James’s Place ended the day more than 13% lower, while Aberdeen Group, Quilter, IG Group and AJ Bell all fell between roughly 3% and 8%. The declines followed renewed concerns about competitive pressure after a US wealth management start-up unveiled artificial intelligence-driven tax tools. London Stock Exchange Group ended slightly higher, adding around 0.2% after reports that activist investor Elliott Management has built a stake and is engaging with management over performance.

In the US, Wall Street finished Wednesday with little overall movement after paring earlier gains. The Dow Jones Industrial Average closed 0.13% lower, the S&P 500 ended broadly flat, and the Nasdaq Composite finished down 0.16%. Earlier in the session, both the S&P 500 and Nasdaq touched their highest levels in more than a week after January payrolls data showed faster job growth and a lower unemployment rate.

By the close, attention had shifted to interest rate expectations, with traders scaling back bets on near-term easing by the Federal Reserve. Technology stocks were mixed. Chipmakers advanced, pushing the Philadelphia semiconductor index more than 2% higher by the close, while software stocks fell back sharply. Microsoft ended the session down just over 2%, and Alphabet closed about 2.4% lower, both weighing on the S&P 500.

Among individual stocks, Generac stood out, closing nearly 18% higher on Wednesday after its quarterly results. Caterpillar added more than 4% after a broker sharply raised its price target. On the downside, Robinhood closed almost 9% lower after missing quarterly revenue expectations. Moderna ended the session down about 3.5% after US regulators declined to review its application for a new influenza vaccine, while Humana fell more than 3% after issuing a cautious profit outlook for 2026.

Forex & Commodities

Currency markets were led overnight and into early European trading by further strength in the Japanese yen, as the post-election reassessment of Japan gathered momentum. The yen moved up against the US dollar, trading around 154.0 per dollar after strengthening to 152.3 during Asian hours. The move has kept the dollar under mild pressure, with positioning shifting towards the yen as a preferred way to express a softer dollar view. Sterling was steady in early London trade, holding near 1.363 against the dollar ahead of UK growth figures due later today. The euro edged lower during the Asian session, trading close to 1.186 against the dollar.

The dollar’s tone improved slightly late on Wednesday following stronger US labour market data, though gains were limited by downward revisions to earlier employment figures. Markets continue to assume the Federal Reserve will leave interest rates unchanged for several months, with attention now firmly on US inflation data due on Friday. In Japan, investors have taken comfort from signals that fiscal policy will remain disciplined under Prime Minister Sanae Takaichi’s government, while the perceived risk of official action near 160 per dollar continues to act as a constraint on dollar strength. Elsewhere, the Australian dollar held near 0.7146 after touching a three-year high earlier this week, following further hawkish guidance from the Reserve Bank of Australia. China’s yuan extended its steady upward run, trading near 6.900 per dollar as seasonal demand for cash linked to the Lunar New Year supported the currency.

Gold prices moved lower early this morning as the firmer dollar weighed on demand. Spot gold eased to $5055 per ounce after settling higher on Wednesday, when investors reassessed the outlook for US interest rates. Silver slipped back to $83.49 per ounce following a sharp rise earlier in the week, while platinum fell to $2109 per ounce and palladium edged up to $1705 per ounce.

Oil prices pushed higher during Asian trading, supported by concerns about US-Iran tensions. Brent crude was trading near $69.59 a barrel and US West Texas Intermediate around $64.83 after both benchmarks closed higher on Wednesday. Comments from US President Donald Trump indicating talks with Tehran would continue kept geopolitical risk in focus, although a large rise in US crude inventories reported overnight capped further gains.