How much will the non-farm payroll affect the US stock market tonight? JP Morgan provides 5 scenarios.

JPMorgan has stated that the US January non-farm payroll data, which will be released later on Friday, must be just right - not too hot, not too cold - for the US stock market to continue rising. The trading department led by Andrew Tyler at JP Morgan stated that if the new non-farm payroll jobs are less than 150,000, the stock market will decline, and if the new non-farm payroll jobs exceed 230,000, it will also put pressure on the stock market as it would increase the bets on the Fed raising interest rates. They mentioned that at the lower end of the range, the risk lies in the job market cooling faster than expected, which will drag down consumer spending. They predict that a report as low as 110,000 will cause the S&P 500 index to drop by 1.5% because it indicates that concerns surrounding global trade are seeping into the US economy at a faster pace than expected. Economists generally predict an increase of 175,000 new non-farm payroll jobs. JPMorgan economists expect an increase of 150,000 new non-farm payroll jobs, lower than the expected average level and below the previous month's 256,000. The S&P 500 index has risen 3.4% so far this year, compared to the MSCI global index excluding the US which rose by 4.9%. After a strong rebound for over two years, the US stock market has lagged at the beginning of 2025, attributed to concerns about overvaluation of large tech companies and uncertainty brought about by Trump's trade policies. Tyler's team still remains "tactically bullish" on the US stock market and advises to buy on dips for longer-term holding. The team states, "We believe that hiring will continue to accelerate, ultimately bringing the unemployment rate below 4%, producing a similar positive impact on spending, driving real GDP growth over 3%, thus boosting income."