Jobs and inflation data, following the brief delay in government data, will be released together next week, bringing the interest rate outlook to the fore for investors. January’s nonfarm payrolls report and consumer price index, set to hit screens days after their original release dates , could re-instill confidence in the market following a recent bout of panic selling. So long as the data turns out better than investors fear. The big jobs report Wednesday is expected to show the U.S. added 60,000 jobs last month, up from an increase of 50,000 in December. It’s also forecast to show the unemployment rate stayed unchanged at 4.4%. January CPI, set to come out next Friday, is expected to show inflation increasing 0.29% and 2.5% on a monthly and yearly basis, respectively, an improvement from December, though still short of the Federal Reserve’s 2% target. Market critical What the two reports suggest about the Fed outlook on the economy will be critical for the market, which is still pricing in two cuts for 2026, more than the central bank has indicated it might deliver. They’re also coming two weeks after policymakers, at their January Federal Open Market Committee meeting, indicated a somewhat hawkish bent toward monetary policy. “Those are the two things that investors are largely looking at to try to figure out how aggressive the Fed’s going to be” in light of the central bank’s dual mandate to ensure price stability and maximum employment, said Thomas Browne, portfolio manager at Keeley Gabelli Funds. “And you get the most important data points regarding both of those next week.” How the central bank may shift in its assessment of its dual mandate is especially acute now that Kevin Warsh has been named as the Trump administration’s nominee to lead the Fed when the Jerome Powell chairmanship ends in May. But some indications suggest that the jobs report could come in weaker than expected. Fed Governor Christopher Waller, one of two dissenting voices to vote in favor of easier money at the last FOMC meeting, has gone on record as saying weakness in the labor market requires more rate cuts. He said last year’s employment data will likely be revised down to show zero job growth in 2025. Fragile labor Outside the big jobs report, a bevy of recent employment data has shown the labor market has become more fragile. This week, payrolls processing firm ADP said private companies added just 22,000 positions in January, far weaker than forecast. Outplacement firm Challenger, Gray & Christmas said layoffs hit their highest January total since the global financial crisis, while hiring intentions are at their lowest since the same period. That could skew the monetary policy outlook, which treads a delicate balance. Investors want more interest rate cuts that will support consumer spending and corporate profits, but not so many that would indicates the economy is slowing down or at risk of recession. For the moment, however, investors remain convinced that the economy is holding up. Markets were last pricing in two interest rate cuts, according to the CME FedWatch Tool. “Time to hit the panic button on labor?… Not quite,” Aditya Bhave, U.S. economist at Bank of America Securities, wrote in a note on Friday. “In our view, the labor market isn’t collapsing but it’s still soft and continues to be the biggest risk to the economic outlook.” Rotation underway A massive rotation inside the stock market that’s been underway could continue in the week ahead if economic data and earnings continue pointing to a rosy outcome. On Friday, stocks surged after a nasty bout of selling this past week, when software stocks, bitcoin and other risk-on favorites led the market lower. On Friday, the Dow Jones Industrial Average closed above 50,000 for the first time ever , after rallying more than 1,200 points. The S & P 500 rose nearly 2%, while the Nasdaq Composite jumped more than 2%. The Dow is the only one of the major averages to close out a winning week, however. The Nasdaq Composite is down 1.8% this week, and off 0.9% this year. Fourth-quarter earnings season continues to be strong. As of Thursday, companies in the S & P 500 were reporting fourth-quarter earnings growth of 13%, better than at the end of last week, according to John Butters. Plenty of financial results are still to come, with Coca-Cola , Ford Motor , On Semiconductor , Robinhood Markets among those reporting next week. Week ahead calendar All times ET. Monday, Feb. 9 Earnings: UDR , Principal Financial Group , ON Semiconductor , Cincinnati Financial , Becton, Dickinson & Co. , Apollo Global Management , Waters , Loews Tuesday, Feb. 10 Earnings: American International Group , Welltower , Robinhood Markets , Ford Motor , Gilead Sciences , Edwards Lifesciences , Assurant , S & P Global , Fiserv , Masco , Marriott International , Incyte , Duke Energy , Datadog , Xylem , Trimble , Coca-Cola Co. , Zimmer Biomet Holdings , Hasbro , DuPont de Nemours , Ecolab , Quest Diagnostics Wednesday, Feb. 11 8:30 a.m. January Jobs Report Earnings: MGM Resorts International , Motorola Solutions , Paycom Software , Equinix , Cisco Systems , Tyler Technologies , Rollins , International Flavors & Fragrances , Applovin , Albemarle , T-Mobile US , McDonald’s , Kraft Heinz , Westinghouse Air Brake Technologies , NiSource , CVS Health , Humana , Hilton Worldwide Holdings , Generac Holdings , Martin Marietta Materials , Ameren Thursday, Feb. 12 Earnings: Arista Networks , Expedia Group , Applied Materials , Wynn Resorts , Vertex Pharmaceuticals , Public Storage , Ingersoll Rand , Federal Realty Investment Trust , Eversource Energy , DexCom , Coinbase Global , Airbnb , Baxter International , Zoetis , Howmet Aerospace , American Electric Power Co. , CBRE Group , Kimco Realty , Exelon , Iron Mountain , Zebra Technologies , West Pharmaceutical Services , PG & E , Entergy Friday, Feb. 13 8:30 a.m. Consumer Price Index (January) 8:30 a.m. Real Earnings (January) Earnings: Moderna
Interest rate outlook comes under scrutiny next week with jobs, inflation data on deck. Here’s what’s ahead