NFP Preview: Benchmark revisions, fate of the March rate cut & implications for the DXY and Dow Jones

• The high-stakes January 2026 Non-Farm Payrolls (NFP) report, now set for release on February 11, 2026, has a consensus forecast of +70,000 jobs.
• The report includes annual benchmark revisions to 2025 data, which could be key.
• The result will determine short-term movement for the US Dollar Index (DXY) and the Dow Jones (DJIA), with a "Goldilocks" outcome (80k–100k) being ideal for equities.

Most Read: NFP and CPI: The next major catalysts as Gold (XAU/USD) rallies 2% to $5060/oz

The January 2026 Non-Farm Payrolls (NFP) report, originally scheduled for early February, was delayed due to a partial federal government shutdown and is now set for release on Wednesday, February 11, 2026.

This release is exceptionally high-stakes because it contains the annual benchmark revisions, which will recalibrate the entire trend of 2025. Markets are currently debating whether the labor market is in a "low-hire, low-fire" stabilization or a deeper, entrenched slowdown.

Headline NFP Forecast: Consensus estimates center around +70,000 jobs. While this appears weak compared to historical averages, it reflects a "stabilizing" trend following late-2025 volatility.

The "March Cut" Bar: The Federal Reserve held rates steady at 3.50%–3.75% in January. For a March rate cut to become the "base case," this NFP report would likely need to see a significant miss (below 50k) or a jump in the unemployment rate toward 4.6%+.

Benchmark Revisions: Keep a close eye on the revisions to 2025 data. If previous months are revised sharply downward, it suggests the Fed may have stayed "too high for too long," increasing the urgency for a March cut.

There is also a growing expectation that we will get benchmark revisions lower by about 60000-70000.

The DXY enters this week testing the 98.00 support level and appears technically oversold.

Bullish Scenario (Stronger Data): A print above 120k would likely spark a "violent short-covering bounce." As markets price out the March cut and converge with the Fed’s "one-cut" dot plot for 2026, the DXY could rally toward the 99.30 (200-day SMA) area.

Bearish Scenario (Weak Data): A print below 50k or negative growth would validate the dovish camp. This would likely drive the DXY through current support toward 97.60, as a March rate cut becomes nearly fully priced in.

US Dollar Index (DXY) Daily Chart, February 9, 2026

Dow Jones (DJIA)

The Dow has recently hit all-time highs, but the delayed NFP creates a "good news is bad news" paradox.

• The "Goldilocks" Outcome: A report near 80k–100k with moderate wage growth (0.3% m/m) would be ideal for equities. It suggests the economy isn't cratering, but isn't hot enough to stop the Fed from easing eventually.
• The "Hard Landing" Fear: A significantly weak number (negative payrolls) might initially boost rate-cut hopes, but could quickly pivot into recession fears, leading to a "sell-the-news" event for the Dow as earnings growth expectations are slashed.
• The Hawkish Shock: If payrolls surprise to the upside (200k+), the Dow could see a sharp pullback as the "higher-for-longer" narrative returns, putting pressure on high-valuation industrial and tech components.

Dow Jones Daily Chart, February 9, 2026

Adding to the complexity is the pending transition in Fed leadership. With the nomination of Kevin Warsh to succeed Jerome Powell, the market is pricing in a shift toward a more "hawkish but pragmatic" Fed. Warsh is expected to prioritize price stability while being open to a "massive positive supply shock" strategy that aligns with the current administration's deregulation and tax-cut agenda.

This political context complicates the Fed's reaction function; the committee may be reluctant to cut rates aggressively if they believe the administration's fiscal stimulus will soon boost growth and potentially reignite inflation later in the year.

Ongoing volatility within the AI and software sectors is sparking fresh concerns regarding the durability of "US exceptionalism," which currently leans heavily on aggressive AI investment and the wealth effect of surging stock prices on high-income consumers.

This anxiety has been further intensified by softening labor market data. In response, swap rates, a key indicator of Federal Reserve expectations, have dropped 12 basis points since the latest Fed meeting, effectively pricing in an additional half-cut for the year.

While a rate reduction in June is now considered a certainty by the markets, the probability of an April cut sits at a toss-up. For the moment, this shift in expectations may have reached its limit; barring significantly distressed employment figures, the Fed is unlikely to accelerate its easing cycle before the summer months.

Follow Zain on Twitter/X for Additional Market News and Insights @zvawda