Stock market today: Dow, S&P 500, Nasdaq rise after jobs surprise with CPI on deck

Wednesday's unexpectedly bullish jobs report has all but shuttered the odds of rate cuts under current Federal Reserve Chair Jerome Powell and narrowed the path to cuts under a Kevin Warsh-led Fed, Bank of America economists wrote in a client note on Thursday, calling the report "a feast for the hawks."

Data released by the Bureau of Labor Statistics on Wednesday showed that the US added 130,000 jobs in January, doubling economists' expectations of 65,000. The unemployment rate also fell to 4.3% from 4.4%, beating expectations that the rate would remain flat.

The data gave lift to the argument that even as inflation has stayed elevated, the labor market is remaining resilient. These conditions are seen as reducing the odds of rate cuts in the near future.

"Payrolls surged above all expectations, the downward revisions were minimal, and wages and hours were up as well," the analysts wrote. "The broad-based strength in the Jan jobs report vindicates our view that the Fed won't cut under Powell."

For now, the economists wrote, BofA is maintaining its prediction of two rate cuts under a Warsh-led Fed. But the swing metric for potential rate cuts under Warsh, they wrote, will be the unemployment rate.

"The key risk to his call for significant cuts is a decline in the u-rate. Therefore, the path to cuts under Warsh (which we don't think the economy needs) now looks narrower," the BofA economists wrote.

"If the u-rate is stable or down even further by June, Warsh might be stuck on hold for the rest of the year."