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Matteo Colombo U.S. stocks on Wednesday gave up gains in volatile trade after the release of the latest Fed minutes. All three major indices had earlier stumbled after the release of mixed economic data before climbing back into positive territory and staying there through most of the day. The minutes of the Federal Reserve’s December monetary policy meeting showed that policymakers were still concerned over high inflation and the resilience showed by the labor market. By late afternoon, the tech-heavy Nasdaq Composite (COMP.IND) had pared its advance and was now up 0.03% to 10,390.13 points. The benchmark S&P 500 (SP500) was now higher by 0.18% to 3,831.04 points, while the blue-chip Dow (DJI) had slipped into the red and was down 0.19% to 33,074.52 points. The major averages had opened higher and then reversed course after the release of the latest Job Openings and Labor Turnover Survey, or JOLTS data. The averages then climbed back up into the green. On the one hand, the JOLTS report showed that job openings remained stable while quit rates were a tick higher, suggesting that the labor market remained tight and resilient despite the Federal Reserve’s aggressive rate hikes. “This is one that Fed officials focus on, and has continued to point to an incredibly tight labor market by pre-pandemic standards,” Deutsche Bank’s Jim Reid said. On the other hand, activity in the manufacturing sector slid deeper into contraction territory in December, giving the Fed some evidence that its aggressive stance has cooled the economy. “Few reasons to be bullish about manufacturing … December’s decline in the ISM manufacturing index continues the broad downtrend since the spring of 2021; the softening accelerated early last year in the wake of Russia’s invasion of Ukraine and aggressive policy tightening by the Fed,” Pantheon Macroeconomics’ Kieran Clancy said. Turning to the bond markets, rates were largely unchanged after the Fed minutes. The 10-year Treasury yield (US10Y) was down 8 basis points 3.71% and the 2-year yield (US2Y) was down 4 basis points to 4.37%. Among active stocks, Microsoft (MSFT) shed about 5% and was the top percentage loser on both the S&P 500 (SP500) and the Dow (DJI). The tech-giant is reportedly building a version of Bing that uses the technology behind ChatGPT. The company is also reportedly in advanced talks to invest in an autonomous driving startup. Salesforce rose about 3% after it announced it was cutting about 10% of its workforce. U.S.-listed Chinese tech stocks gained amid signs that the government was loosening up some of its tight regulatory control over tech companies.

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