The jobs report may have looked strong, but under the surface there's no escaping the threat that artificial intelligence poses to the labor market. It might be safer to be a nurse than a software developer.

Investors should generally be happy about January's figures showing the strongest jobs growth in more than a year. A spluttering labor market looks to be strengthening, with unemployment dipping to 4.3% and workers' wages rising. The Federal Reserve looks unlikely to have to cut interest rates in the near future.

But there were a few worrying signs. Firstly, the gains were almost all in healthcare jobs or positions related to the sector, which is relatively insensitive to the wider economy as the U.S.'s aging population drives demand for medical assistance and social care. Meanwhile, additions from previous years were revised lower, meaning the American economy added roughly 1.68 million jobs over 2024 and 2025, compared with the previous estimate of about 2.58 million.

The revisions were expected, so the effective loss of around 900,000 jobs didn't unduly shock traders. But it suggests the labor market might still be fragile just as AI threatens to transform everything from software to legal services. With 34,000 jobs lost across the financial activities and information sectors in January, there is some evidence of automation beginning to hit white-collar workers. Analysts at Goldman Sachs put tech-related information employment at its lowest level since May 2022. Companies like Amazon.com are slashing their corporate workforces back to levels not seen since the Covid pandemic, although it's not clear if this is due to genuine AI improvements or using 'AI-washing' to cut bloated teams.

Current Fed Chair Jerome Powell might now be able to see out the rest of his term with no more interest-rate cuts. But his nominated successor Kevin Warsh is likely to have to figure out how to support an economy upended by the effects of AI.

-- Adam Clark

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***

Jobs Report Complicates White House's Rate-Cut Push

Wednesday's stronger-than- expected jobs report means the Federal Reserve is likely to keep interest rates on hold when policymakers meet in March. The jobs numbers did little to build a case for a rate cut, and recent commentary from voting officials reinforce a pause-for-longer stance.

   -- President Donald Trump has consistently called for the Fed to cut rates, 
      even though inflation has remained stubbornly above the central bank's 2% 
      target level. Kevin Warsh, Trump's nominee to replace Jerome Powell as 
      Fed chair in May, has also called for lower interest rates. 
 
   -- But January's jobs rose 130,000 and wage growth firmed. Average hourly 
      earnings for all employees on private nonfarm payrolls rose by 3.7% from 
      a year ago. That's a tick higher than December's annual wage growth but 
      still below the more than 4% growth seen in 2024. 
 
   -- Fed officials have pushed for patience. Cleveland Fed President Beth 
      Hammack said rates could remain on hold "for quite some time," and Dallas 
      Fed President Lorie Logan warned that cutting too soon could reignite 
      price pressures. Inflation hasn't been below 2% since early 2021. 
 
   -- The Fed has lowered its benchmark rate to a range of 3.5%-3.75%. 
      Officials now appear focused on waiting for clearer evidence that 
      inflation is sustainably returning to the bank's target. 

What's Next: There is still one more jobs report and more inflation data due before the Fed's March 17-18 rate-setting meeting. But with the labor market holding up and policymakers emphasizing caution, the bar for a March cut has risen, complicating the White House's push for lower rates.

-- Nicole Goodkind and Megan Leonhardt

***

Ackman Reveals New Stakes in Meta, Amazon, and Hertz

In the race to harness artificial intelligence, Meta Platforms looks to be a stand-out winner in the eyes of Bill Ackman. The hedge fund billionaire has made a fresh bet on Meta, calling it one of the clearest beneficiaries of the integration of artificial intelligence into its business platforms.

   -- Ackman, who runs Pershing Square, said in an investor presentation on 
      Wednesday that the fund began buying shares in November and that they 
      made up about 10% of Pershing's capital as of the end of December. It 
      also has new investments in Amazon and Hertz. 
 
   -- Pershing outlined its investment thesis for Meta, the parent of 
      social-media platforms such as Facebook and Instagram. It said concerns 
      around Meta's AI-related spending initiatives are "underestimating the 
      company's long-term upside potential from AI." 
 
   -- It called out Meta's "high quality" advertising business model, saying 
      the tech giant's visibility into consumer behavior and interests enables 
      it to be precise with ad targeting, making it attractive to advertisers. 

What's Next: Meta has said it expects to spend between $115 billion and $135 billion on capital projects this year, including the facilities that power AI and hiring AI researchers. That's nearly twice what it spent last year. Pershing said this planning spending boost positions Meta for "significant upside potential."

-- Liz Moyer

***

McDonald's Affordability Push Paying Off In Same Store Sales

At McDonald's, an affordability push is paying off, with a bigger than expected rise in global same-store sales and fourth quarter revenue that surpassed estimates. CEO Chris Kempczinski says more people are visiting because of a price-reduction strategy that is winning over the business of lower income customers.

   -- Kempczinski vowed to analysts that the fast food chain "is not going to 
      get beat on value and affordability." Fourth quarter adjusted earnings 
      were $3.12 a share on revenue of $7.01 billion. Global comparable sales 
      rose 5.7%, and comparable sales in the U.S. rose 6.8%. 
 
   -- McDonald's is planning an aggressive expansion, aiming to reach 50,000 
      restaurants globally by the end of 2027, from about 43,400 restaurants 
      worldwide in 2024. The industry faces many challenges, including 
      consumers who have become more sensitive to higher menu prices and the 
      soaring cost of beef and other commodities. 
 
   -- McDonald's aimed to attract more customers who spend more each visit. It 
      has leaned on bundled value deals to appeal to budget-conscious consumers, 
      while expanding its menu to maintain interest in the brand. That includes 
      introducing new items, reviving customer favorites, and expanding its 
      beverage offerings. 
 
   -- Separately, Kraft Heinz has paused its planned split into two companies. 
      CEO Steve Cahillane, who started the job in January, said it was prudent 
      to pause the split, which was going to divide faster-growing brands like 
      Heinz ketchup and Philadelphia cream cheese from brands like Oscar Mayer 
      and Lunchables. 

What's Next: Kraft Heinz forecast adjusted earnings of $1.98 to $2.10 a share in 2026, well below analyst expectations. The company said it would invest $600 million in marketing, sales, and research and development to kick-start a recovery in the U.S. and accelerate growth in its higher-performing growth brand portfolio.

-- Evie Liu, Nate Wolf, and Liz Moyer

***

Congress Formally Pushes Back at Trump's Tariffs

Congress has formally pushed back against President Donald Trump's signature economic policy. The House approved a resolution revoking tariffs on Canada. Though the resolution has virtually no chance of going into effect, it is the latest sign that Trump's power is eroding.

   -- The resolution, offered by Rep. Gregory Meeks (D., N.Y.), passed 219 to 
      211, with six Republicans joining Democrats to end the tariffs Trump 
      imposed on products from Canada last February. It has a good chance of 
      passing the Senate, where several moderate Republicans have reservations 
      about Trump's tariff push. 
 
   -- But even if it passes there, Trump could veto it. There aren't nearly 
      enough votes in the House and Senate to override him. Trump threatened 
      GOP lawmakers Wednesday night, saying anyone voting for the measure would 
      suffer the consequences at election time. 
 
   -- The break in party unity could signal that Trump is already entering the 
      lame-duck phase. Last year was likely Peak Trump, the apex of his 
      presidential power, with a compliant Congress and with very little 
      pushback from the Courts," wrote Pimco head of public policy Libby 
      Cantrill in a note. 
 
   -- Among the threats to Trump's influence are the courts, which are just now 
      nearing definitive rulings on many of his most controversial policies. 
      Another is the 2026 election, where some GOP lawmakers might find it 
      tempting to break with Trump's more unpopular positions to preserve their 
      reelection chances. 

What's Next: The Supreme Court is expected to decide soon on Trump's use of emergency powers to impose tariffs. If both houses of Congress pass the Canada resolution but Trump vetoes it, Justices who were already skeptical of the executive branch's tariff authority could become even more wary, says Veda Partners' Henrietta Treyz.

-- Joe Light

***

El Paso Airspace Shutdown Highlights Rise of Anti-Drones

An incident that temporarily shut down the airspace around El Paso, Texas, highlights the rise of commercial drones. They have become cheaper to make and indispensable to the military for gathering intelligence, accompanying crewed fighters, and patrolling the seas. They also create the need for anti-drone technology.

   -- Transportation Secretary Sean Duffy, reacting to a social media post that 
      said the airspace restrictions were lifted on Wednesday, explained that 
      the Federal Aviation Administration and Defense Department had to swiftly 
      address a "cartel drone incursion." The threat had been neutralized and 
      normal flights resumed, he said. 
 
   -- The Pentagon deployed a high-energy laser against what they thought was a 
      drug-cartel drone but it turned out to be a party balloon, The Wall 
      Street Journal reported, citing people familiar with the matter. The 
      weapon was being tested at Fort Bliss in El Paso for counter-drone 
      purposes, the report said. 
 
   -- Drones and anti-drones are a growing business. RTX said on Wednesday that 
      it successfully "showcased the capabilities of Coyote Block 3 
      Non-Kinetic" anti-drone technology, defeating drone swarms launched 
      during a recent Army demo. It said it "demonstrated exceptional launch, 
      flight, intercept, and recovery capabilities." 
 
   -- RTX explained in a press release that the Coyote Block system can loiter 
      and defeat drone swarms by using a non-kinetic payload -- something that 
      doesn't explode -- to minimize the potential for collateral damage. The 
      system is designed to be recovered and reused. 

What's Next: The parent of Raytheon received a $5 billion contract from the Army -- the largest counter-drone contract ever -- last fall for the military's anti-drone program. Raytheon said it has invested significantly in Coyote production to keep pace with next-generation threats.

-- Al Root and Liz Moyer

***

-- Newsletter edited by Liz Moyer, Callum Keown, Rupert Steiner

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February 12, 2026 06:50 ET (11:50 GMT)

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