U.S. stocks ended Wednesday’s session with gains as traders weighed the concerns Federal Reserve officials voiced during their last policy meeting against key data showing the U.S. economy is slowing.

The S&P 500 and the Nasdaq 100 snapped two days of losses. Treasuries ended Wednesday mixed after paring gains. The dollar dropped. 

Minutes of the Federal Open Market Committee’s December meeting showed officials cautioning that an “unwarranted” loosening of financial conditions would complicate their efforts to reach their inflation target. Policymakers were also concerned that inflation will remain entrenched if the labor market stays resilient.

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While officials did seem to consider the need to balance two-sided risks, the meeting minutes highlighted that the Fed will have a lot more to do if markets do not cooperate. 

“The Fed wanted to send a message to the market that they would not be easing or cutting rates anytime in 2023,” said Joe Gilbert, portfolio manager for Integrity Asset Management. “However, we must remember that the Fed also did not forecast raising rates by 400 basis points twelve months ago, so their forecasting ability of their own actions is sometimes quizzical.”

Investors also assessed slew of economic data on Wednesday. Latest numbers from the Institute for Supply Management underscored improving supply chain conditions, declining input prices and slower demand — all developments the Fed would welcome. But job openings data pointed to a robust labor market, which shook sentiment earlier in the session.

All eyes will be on the nonfarm payrolls report on Friday, for any signs of possible softening in the labor market. 

Key events this week:

• FOMC meeting minutes, Wednesday
• Eurozone PPI, Thursday
• U.S. ADP employment change, initial jobless claims, Thursday
• China trade, Caixin PMI, Thursday
• Eurozone retail sales, CPI, consumer confidence, Friday
• Germany factory orders, Friday
• U.S. nonfarm payrolls, factory orders, durable goods, Friday

The main markets moves are:

Stocks

• The S&P 500 rose 0.7 per cent as of 4 p.m. New York time
• The Nasdaq 100 rose 0.5 per cent
• The Dow Jones Industrial Average rose 0.4 per cent

Currencies

• The Bloomberg Dollar Spot Index fell 0.4 per cent
• The euro rose 0.5 per cent to US$1.0603
• The British pound rose 0.8 per cent to US$1.2059
• The Japanese yen fell 1.3 per cent to 132.69 per dollar

Cryptocurrencies

• Bitcoin rose 0.8 per cent to US$16,800.86
• Ether rose 3.3 per cent to US$1,250.87

Bonds

• The yield on 10-year Treasuries declined five basis points to 3.69 per cent
• Germany’s 10-year yield declined 12 basis points to 2.27 per cent
• Britain’s 10-year yield declined 16 basis points to 3.49 per cent

Commodities

• West Texas Intermediate crude fell 5 per cent to US$73.07 a barrel
• Gold futures rose 0.7 per cent to US$1,859.10 an ounce