Stocks closed lower yesterday. Not by much, but lower nonetheless.

Stocks opened strongly on a better-than-expected jobs report. But by mid-morning, the gains were gone.

The indexes flitted between positive and negative territory for most of the afternoon before settling slightly in the red by the close.

Yesterday's Employment Situation report came in much better than expected with 130,000 new jobs being created in January (172,000 in the private sector and -42,000 in the public), vs. the consensus for 70,000 (75K private and -5K public).

The unemployment rate eased to 4.3% vs. last month's 4.4% and views for the same. The participation rate rose to 62.5% from 62.4%. Average hourly wages were up 0.4% m/m vs. last month's downwardly revised 0.1% (from 0.3%), and estimates for 0.3%. The y/y change was at 3.7%, up a bit vs. the consensus of 3.6%, but down from last month's 3.8% pace.

The industries with the biggest job gains were Health Care, which added 82,000 jobs; Social Assistance jobs were up 42,000; and Construction was up 33,000.

Revisions from previous month's saw November shed -15,000 jobs to 41K, and December lessen by -2,000 to 48K.

All in all, it was a solid report. And it underscored the resilience of the economy. While job gains were clustered in just a few industries, most of the other industries were essentially flat. And flat is better than down. As for the sharp government reductions, much of that much was a result of deferred resignation offers from 2025 that finally came off federal payrolls last month.

The only downside to the stronger report was calling into question the timing of the next rate cut. With inflation easing and the labor market stabilizing (even strengthening), there's an argument to be made that there's no rush to cut.

Although, the odds even prior to yesterday's jobs report, favored a cut in June rather than March or April. (Fed Chair Jerome Powell's term ends in in May. And the new nominee, Kevin Warsh, is expected to push for cuts in the first month he's at the helm.)

Earnings season continues. Before the open yesterday, Vertiv posted a positive EPS surprise of 5.43%, and a positive sales surprise of 0.07%. That translated to a quarterly EPS growth rate of 37.4% vs. this time last year, and a sales growth of 22.7%. Increased data center demand sent backlog orders surging to $15 billion, up more than 100% vs. last year. And they see strong pipeline growth. Shares soared by 24.5% yesterday, hitting new all-time highs in the process.

After the close, AppLovin posted a positive EPS surprise of 12.1%, and a positive sales surprise of 2.88%. That equated to a quarterly EPS growth rate of 87.3%, and a sales growth of 21.2%. They also upped their revenue guidance for next quarter by 3% above expectations. But they've struggled lately, after putting in a spectacular performance last year of 108%. Nevertheless, they were down -3.41% in the regular session, and another -7% in after-hours trade.

Today we'll hear from another 280 companies set to report, including Anheuser-Busch InBev before the open, and Arista Networks and Applied Materials after the close.

On the economic report front today we'll get Weekly Jobless Claims, and Existing Home Sales.

And then tomorrow we'll get the Consumer Price Index (CPI) retail inflation report for January.

In the meantime, with 2 more days to go, the major indexes are mostly up for the week. And with a little bit of cooperation, they may all be.

See you tomorrow,