(Reuters) – The benchmark S&P 500 and the Nasdaq opened lower on Thursday after a stronger-than-expected private payrolls report indicated resilience in the labor market, tempering expectations on how early interest-rate cuts could begin. The S&P 500 opened lower by 5.27 points, or 0.11%, at 4,698.72, while the Nasdaq Composite dropped 47.98 points, or 0.31%, to 14,545.23 at the opening bell.

The Dow Jones Industrial Average rose 51.2 points, or 0.18%, at the open to 37,498.28.

(Reporting by Shristi Achar A in Bengaluru; Editing by Devika Syamnath)

By Johann M Cherian and Shristi Achar A

(Reuters) -Futures tracking the S&P 500 and Nasdaq were largely subdued on Thursday as investors awaited more U.S. economic data for cues on the Federal Reserve’s monetary easing path, while Apple slipped following a rating downgrade.

Wall Street stumbled in the first two sessions of 2024, with the benchmark S&P 500 notching its worst two-day performance since late October as investors booked profits after a blistering rally last year.

Hopes that the Fed could start interest rate cuts this year had driven much of the gains towards the end of 2023, though the latest minutes from the central bank’s December policy meeting did not offer many clues on when the easing might commence.

“Those inclined to believe a pivot to lower rates is on the way could take reassurance from indications the central bank thinks inflation is under control,” said Russ Mould, investment director at AJ Bell.

“Anyone more cautious on the prospects for near-term rate cuts could point to a (Fed) reference to maintaining a restrictive stance ‘for some time’.”

Traders now see a 68.3% chance for at least a 25 basis points (bps) rate cut in March and a near 94% probability for May, according to the CME Group’s FedWatch tool.

Yields on U.S. Treasury tenors, an indicator of interest rate expectations, edged up, with the yield on the benchmark 10-year note climbing to 3.964%. [US/]

Investors now await the ADP National Employment Report due at 8:15 a.m. ET, and a key jobs report on Friday, both of which could shed some light on the health of the labor market and influence expectations on the rate trajectory.

Also on tap are initial jobless claims data for the week ended Dec. 30 and December S&P services sector activity data.

Apple was the only megacap stock in the red, down 0.7% in premarket trading, after brokerage Piper Sandler downgraded the iPhone maker to “neutral” from “overweight”, days after Barclays also cut its rating.

Micron Technology rose 1.1% after brokerage Piper Sandler upgraded its recommendation on the chipmaker to “overweight” from “neutral”.

At 7:04 a.m. ET, Dow e-minis were up 41 points, or 0.11%, S&P 500 e-minis were down 1.5 points, or 0.03%, and Nasdaq 100 e-minis were down 23 points, or 0.14%.

Among other movers, sportswear makers Nike and Foot Locker shed 1.2% and 2.4%, respectively, after UK retailer JD Sports lowered its annual profit forecast.

Dow component Walgreens Boots Alliance added 3.3% after reporting better-than-expected profit for the first quarter on strength in its pharmacy operations.

Mattel dropped 1.5% after brokerage Roth MKM downgraded the Barbie doll maker to “neutral”.

Fubotv gained 2.4% after the sports TV streaming platform and Nexstar Media reached a new multi-year distribution agreement.

(Reporting by Johann M Cherian and Shristi Achar A in Bengaluru; Editing by Devika Syamnath)

JAKARTA (Reuters) -Indonesia’s vote watchdog ruled on Thursday the president’s son – the leading candidate’s running mate in coming elections – had broken rules during his campaign, a breach that one expert said could leave him facing a reprimand but not disqualification.

Gibran Rakabuming Raka, who is seeking to become vice-president in the vote scheduled for Feb. 14, denied any wrongdoing.

The watchdog, known by the abbreviation Bawaslu, said 36-year-old Gibran had violated a Jakarta gubernatorial regulation when he handed out free milk to people at a public “car-free day” in December.

A 2016 Jakarta gubernatorial order bars “events for the interests of political parties” during car-free days, when vehicles are banned from major thoroughfares as part of an environmental push.

The watchdog said it did not have the power to penalise him itself for breaking an order imposed by authorities in the capital. Jakarta Governor Heru Budi Hartono did not respond to a Reuters request for comment.

Bawaslu made the announcement a day after calling Gibran in for hours of questioning. He later told reporters his actions had not had any links to any political party.

Titi Anggraini, an analyst from the Association of Elections and Democracy, told Reuters the most Gibran could face would be a reprimand for what was considered a light violation.

She said the watchdog did have the power to reprimand Gibran directly for breaching other regulations that required him to seek permission for campaigning at the car-free day. But that sanction would also fall short of a disqualification.

President Joko Widodo’s eldest son is running with presidential candidate Prabowo Subianto, the current defence minister.

Most polls suggest the pair command a solid lead over rival presidential candidates Anies Baswedan and Ganjar Pranowo – though there has been an uptick in popularity for Anies, and two surveys in December by independent pollsters had him overtaking Ganjar.

Gibran’s candidacy has been divisive because it was only allowed after the constitutional court ruled a minimum age requirement of 40 for candidates need not apply in all cases.

(Reporting by Stanley Widianto and Ananda Teresia; Editing by Raju Gopalakrishnan and Andrew Heavens)

(Reuters) – U.S. stock index futures ticked up on Thursday, recovering from a grim start to the new year, as investors awaited more economic data for cues on the Federal Reserve’s monetary easing path, while Apple slipped following a rating downgrade.

Wall Street stumbled in the first two sessions of 2024, with the benchmark S&P 500 notching its worst two-day performance since late-October as investors booked profits after a blistering rally last year.

Hopes that the Fed could start interest rate cuts this year had driven much of the gains towards the end of 2023, though the latest minutes from the central bank’s December policy meeting did not offer many clues on when the easing might commence.

Traders now see a 72.6% chance for at least a 25 basis points (bps) rate cut in March and a near 96% probability for May.

Yields on U.S. Treasury tenors, an indicator of interest rate expectations, edged up, with the yield on the benchmark 10-year note climbing to 3.955%. [US/]

Investors now await the ADP National Employment Report due at 8:15 a.m. ET, ahead of a key jobs report on Friday, both of which could shed some light on the health of the labor market and influence expectations on the rate trajectory.

Economists polled by Reuters expect private payrolls to have increased by 115,000 in December, from a 103,000 rise the month before.

Also on tap are initial jobless claims data for the week ended Dec. 30 and December S&P services sector activity data.

Apple was the only megacap stock in the red, down 0.9% in trading before the bell, after brokerage Piper Sandler downgraded the iPhone maker to “neutral” from “overweight”.

Micron Technology rose 2.1% after brokerage Piper Sandler upgraded its recommendation on the chipmaker to “overweight” from “neutral”.

Other semiconductor stocks such as Advanced Micro Devices and Broadcom also gained 0.7% and 0.8%, respectively, recovering from a recent downturn.

At 5:52 a.m. ET, Dow e-minis were up 35 points, or 0.09%, S&P 500 e-minis were up 3 points, or 0.06%, and Nasdaq 100 e-minis were up 17.75 points, or 0.11%.

Among other movers, sportswear makers Nike and Foot Locker shed 1.4% and 1.4% after UK retailer JD Sports lowered its annual profit forecast.

Mattel dropped 2.6% after brokerage Roth MKM downgraded the Barbie doll maker to “neutral”.

Fubotv gained 4.8% after the sports TV streaming platform and Nexstar Media reached a new multi-year distribution agreement.

(Reporting by Johann M Cherian in Bengaluru; Editing by Devika Syamnath)

By Jonathan Stempel

NEW YORK (Reuters) – Consumer Reports has found that plastics retain a “widespread” presence in food despite the health risks, and called on regulators to reassess the safety of plastics that come into contact with food during production.

The non-profit consumer group said on Thursday that 84 out of 85 supermarket foods and fast foods it recently tested contained “plasticizers” known as phthalates, a chemical used to make plastic more durable.

It also said 79% of food samples in its study contained bisphenol A (BPA), another chemical found in plastic, and other bisphenols, though levels were lower than in tests done in 2009.

Consumer Reports said none of the phthalate levels it found exceeded limits set by U.S. and European regulators.

It also said there was no level of phthalates that scientists confirm is safe, but that does not guarantee the safety of foods you eat.

Phthalates and bisphenols can disrupt the production and regulation of estrogen and other hormones, potentially boosting the risk of birth defects, cancer, diabetes, infertility, neurodevelopmental disorders, obesity and other health problems.

Among tested supermarket foods, Annie’s Organic Cheesy Ravioli contained the most phthalates in nanograms per serving, 53,579, followed by Del Monte sliced peaches and Chicken of the Sea pink salmon.

Elevated phthalate levels were also found in products such as Cheerios, Gerber baby food and Yoplait yogurt, and several burgers, nuggets and fries from Wendy’s, Burger King and McDonald’s.

Consumer Reports also found variations among similar products. The 33,980 phthalates in nanograms per serving in Wendy’s Crispy Chicken Nuggets, for example, was more than four times the level in McDonald’s Chicken McNuggets.

“That tells us that, as widespread as these chemicals are, there are ways to reduce how much is in our foods,” said James Rogers, who oversees Consumer Reports’ product safety testing.

The consumer group said a reassessment by the U.S. Food and Drug Administration and other agencies of the risks of plasticizers is “overdue and essential.”

Polar raspberry lime seltzer was the only tested product containing no phthalates.

General Mills, whose brands include Annie’s, Cheerios and Yoplait, did not immediately respond to requests for comment. Burger King and Wendy’s did not immediately respond to similar requests.

Chicken of the Sea and Del Monte said they do not add phthalates to their food, and receive similar assurances from their suppliers. Del Monte also said that phthalates are “widespread in the environment.”

Gerber and McDonald’s said they follow regulatory requirements, and require rigorous testing for chemicals in packaging.

(Reporting by Jonathan Stempel in New York; Editing by Sandra Maler)

A look at the day ahead in U.S. and global markets from Mike Dolan

A relatively soothing bond market reading of the Federal Reserve’s latest meeting minutes has helped calm the new year horses, but edgy geopolitics and oil price gains still rankle.

Even though Wall St stock indexes clocked a second straight day of hefty losses on Wednesday – led this time by the biggest one-day drop in small cap stocks since the March regional bank crunch – bonds rallied on the minutes.

While the Fed predictably gave no timeline for rate cuts this year, it flagged impressive disinflation and concerns about “overly restrictive” policy into a slowing economy – and risks to its dual mandate of stable prices and maximum employment in the event of an “abrupt downshift” in labor markets.

But Treasuries – where 10-year yields have retreated about 5 basis points from Wednesday’s 4% peaks – got an additional fillip from a Fed discussion about how it may trail a slowing of its balance sheet rundown – or “quantitative tightening” (QT) process.

Although Fed officials said market liquidity was still abundant, some pointed to the steep drop in daily takeup of the Fed’s “reverse repo” money draining facility and said it would be “appropriate” to begin discussing the factor that may lead the central bank to slow the balance sheet runoff and halt QT.

The effect of the Fed minutes combined with news U.S. job openings fell to nearly a three-year low in November and an ISM manufacturing survey showing another month of contracting activity and falling input prices.

The effect of the Fed minutes combined with news that U.S. job openings fell to nearly a three-year low in November as the labor market gradually cools and an ISM manufacturing survey showing another month of contracting activity and falling input prices.

With the fourth-quarter corporate earnings season looming next week, the cooling of the wider economy has seen the U.S. economic surprise index on the cusp of turning negative for the first time since May.

Richmond Fed boss Thomas Barkin struck a dovish note on Wednesday and flagged “real progress” on inflation that made a soft economic landing “increasingly conceivable”.

The upshot of all the new information was another slight drop in the futures’ market chances of first Fed rate cut by March to 75% – but with 146 bps of rate cuts still priced for the whole year. And U.S. stock futures have caught a break and are trading higher at last before Thursday’s open.

The dollar index retreated from near one-month highs as U.S. yields subsided.

SUPPLY CHAIN JITTERS

Ahead of Friday’s December employment report, Thursday’s data diary throws up ADP’s private sector jobs reading and Challenger’s layoff numbers for the same month – as well as weekly jobless claims.

But as many eyes may be on the New York Fed’s global supply chain pressure index – with fears of an escalation of the Middle East conflict increasing jitters about shipping supply chains and oil prices.

Members of the U.N. Security Council on Wednesday called on Yemen’s Iran-aligned Houthis to halt their attacks on shipping in the Red Sea and Gulf of Aden, saying they are illegal and threaten regional stability, freedom of navigation and global food supplies.

But tensions in Iran increased as its elite Revolutionary Guards and First Vice President Mohammad Mokhber vowed revenge for explosions this week that killed nearly 100 people at a ceremony to commemorate top commander Qassem Soleimani, who was killed by a U.S. drone in 2020 in Iraq.

Oil rose more than 1% on Thursday – with year-on-year U.S. crude flipping to its most positive since October – and added to gains in the previous session on concerns over Middle Eastern supply following disruptions at an oilfield in Libya and heightened tensions regarding the Israel-Hamas war.

U.S. crude gains were spurred by news the U.S. government was seeking three million barrels to re-fill its strategic petroleum reserve.

In Europe, headline annual inflation rates for last month climbed again – but monthly readings were more subdued and below many forecasts.

Key diary items that may provide direction to U.S. markets later on Thursday:

* U.S. Dec ADP private sector jobs, Dec Challenger layoffs, weekly jobless claims, NY Fed’s Dec global supply chain pressure index, U.S. Dec final S&PGlobal service sector survey

* U.S. Treasury sells 4-week bills

* U.S. corporate earnings: Conagra brands, Walgreens Boots Alliance, Lamb Weston Holdings

(By Mike Dolan, Editing by Alison Williams; [email protected])

By Jarrett Renshaw

(Reuters) – President Joe Biden will mark the third anniversary of the Jan. 6 attacks on the U.S Capitol with a political speech the day before to make the case that Republican Donald Trump poses an existential threat to democracy, Biden’s re-election campaign said on Wednesday.

Biden’s campaign said he will speak near Valley Forge, Pennsylvania, where George Washington established headquarters during the Revolutionary War. The speech site, Montgomery County Community College, is about 15 miles away.

Biden will follow the Friday visit with a campaign stop on Monday at Mother Emanuel AME Church in Charleston, South Carolina, where a white supremacist in 2015 killed nine parishioners at the historic Black church.

Biden is applying the heat on Trump as a way to change his campaign’s narrative away from his handling of the U.S. economy and his age, 81.

Trump is 77.

Biden had planned to deliver his Pennsylvania remarks on Saturday, the actual anniversary of the Jan. 6, 2021, assault on the U.S. Capitol by Trump supporters, but moved it to Friday to avoid a forecast winter storm.

In South Carolina, which Democrats moved to the front of the presidential primary calendar this election cycle after Black voters there helped Biden clinch the nomination in 2020, Biden will focus on what the campaign described as rising threats of political violence.

Taken together, the two visits will represent Biden’s most direct public attacks so far in the 2024 race on top Republican rival Trump and the party he controls, and mark a shift in tone after Biden spent much of 2023 touting his signature legislation and the economy.

“The choice for voters next year will not simply be between competing philosophies of governing. The choice for the American people in November 2024 will be about protecting our democracy and every American’s fundamental freedoms,” said Biden campaign manager Julie Chávez Rodríguez.

Thousands of Trump supporters attacked the U.S Capitol on Jan. 6, 2021, in a bid to stop formal certification of the Republican president’s election defeat, causing millions of dollars in damage. Four people died on the day of the attack, and one Capitol Police officer who fought against the rioters died the next day. Four officers have since taken their own lives and 140 others were injured.

Trump faces federal charges for his wide-ranging attempts to overturn the 2020 election and was kicked off ballots in Colorado and Maine due to his role in fueling the Capitol attack. Lawyers for Trump have disputed that he engaged in insurrection and argued that his remarks to supporters on the day of the 2021 riot were protected by his constitutional right to free speech.

Trump’s campaign advisers Chris LaCivita and Susie Wiles on Tuesday released a memo outlining their view of the presidential race. They blamed Biden for legal indictments of Trump and for judicial decisions to declare Trump ineligible for the ballot.

“Please make no mistake: Joe Biden and his allies are a real and compelling threat to our Democracy,” they wrote. “In fact, in a way never seen before in our history, they are waging a war against it.”

Biden held a lunch with a group of historians and scholars on Wednesday to discuss ongoing threats to democracy in the U.S. and abroad, the White House said. “What happened on Jan. 6 was unprecedented – an attack on our core principles, an attack on our democracy,” said White House press secretary Karine Jean-Pierre.

Trump holds a marginal 2-point lead in a head-to-head matchup, 38% to 36%, with 26% of respondents saying they were unsure or might vote for someone else, according to the latest Reuters/Ipsos poll. Trump is the frontrunner for the Republican nomination by a wide margin, the poll showed.

Iowa will hold the first Republican nominating contest on Jan. 15. New Hampshire will hold the nation’s first primary on Jan. 23, although Biden will not be on the Democratic ballot there because the state defied a plan to have New Hampshire cede its first-in-the-nation primary. South Carolina’s Democratic primary will be held on Feb. 3.

In the upcoming weeks, the Biden re-election campaign will ratchet up operations and events, including hiring key directors in all 50 states and hitting the airwaves with new ads.

Vice President Kamala Harris is also expected to speak in South Carolina on Saturday and again on Martin Luther King Jr. Day later this month, and is also expected to take a message about threats to democracy to the state’s largely Black Democratic electorate.

(Reporting By Jarrett Renshaw; Additional reporting by Trevor Hunnicutt, Heather Timmons and Steve Holland; Editing by Mary Milliken, Stephen Coates, Nick Zieminski, Daniel Wallis and Leslie Adler)

By Gabriella Borter and Doina Chiacu

WASHINGTON (Reuters) – Harvard President Claudine Gay said she would resign from her position on Tuesday, ending a six-month tenure marred by allegations of plagiarism and backlash over her congressional testimony about antisemitism on campus.

Gay had come under pressure to resign from Harvard’s Jewish community and some members of Congress over her comments at the Dec. 5 congressional hearing, while also facing several allegations of plagiarism for her academic work in recent months.

In a letter to the Harvard community, Gay said her decision to step down had been “difficult beyond words.”

“After consultation with members of the (Harvard) Corporation, it has become clear that it is in the best interests of Harvard for me to resign so that our community can navigate this moment of extraordinary challenge with a focus on the institution rather than any individual,” she wrote.

The Harvard Corporation, the university’s 11-member governing body, said in an email to the community that its members had accepted Gay’s resignation “with sorrow,” and that the school’s provost and chief academic officer, Alan Garber, would take over as interim president.

Gay, former University of Pennsylvania President Liz Magill and Massachusetts Institute of Technology President Sally Kornbluth testified before a U.S. House of Representatives committee on Dec. 5 about a rise in antisemitism on college campuses following the outbreak of the Israel-Hamas war in October.

The trio declined to give a definitive “yes” or “no” answer to a question by U.S. Republican Representative Elise Stefanik as to whether calling for the genocide of Jews would violate their schools’ codes of conduct regarding bullying and harassment, saying they had to balance it against free-speech protections.

Citing dissatisfaction with their testimony, more than 70 U.S. lawmakers signed a letter demanding that the governing boards of the three universities remove the presidents.

Magill resigned after receiving backlash for her comments.

“TWO DOWN,” Stefanik wrote on social-media platform X, formerly known as Twitter, on Tuesday. “Harvard knows that this long overdue forced resignation of the antisemitic plagiarist president is just the beginning of what will be the greatest scandal of any college or university in history.”

‘RACIST VITRIOL’

Despite the controversy ensnaring Gay, the Harvard Corporation last month reaffirmed its confidence that she could lead the school through a period of high tension over the war in the Middle East. It also said an independent review of Gay’s academic work found she had not committed research misconduct. She has submitted several corrections for citation errors in recent weeks.

Gay, the first Black president in Harvard’s 388-year history, and the members of the Harvard Corporation said in their letters to the community on Tuesday that she had been subject to racist attacks.

Some of Gay’s critics, including billionaire hedge fund manager Bill Ackman, have argued that she was chosen for the role as part of the school’s effort to promote diversity rather than for her qualifications. Right-wing activists, including journalist and researcher Christopher Rufo, celebrated Gay’s resignation on Tuesday as a win in their mission to dismantle diversity, equity and inclusion programs.

Ackman, who heads Pershing Square Capital Management, could not immediately be reached for comment on Tuesday. He reposted the Harvard Crimson’s story about Gay’s resignation on social media platform X.

“It has been distressing to have doubt cast on my commitments to confronting hate and to upholding scholarly rigor – two bedrock values that are fundamental to who I am – and frightening to be subjected to personal attacks and threats fueled by racial animus,” Gay said in her statement.

The Harvard Corporation wrote that she had been subjected to “deeply personal and sustained attacks” that included “racist vitriol directed at her through disgraceful emails and phone calls.”

Reverend Al Sharpton, president of the National Action Network, said in a statement on Tuesday that Gay’s resignation was “an assault on the health, strength, and future of diversity, equity and inclusion.” He blamed it on what he called Ackman’s “relentless campaign” against Gay. Sharpton said the National Action Network was planning a protest outside Ackman’s New York office on Thursday.

(Reporting by Gabriella Borter and Doina Chiacu in Washington; Additional reporting by Svea Herbst in Providence, Rhode Island; Editing by Susan Heavey, Jonathan Oatis and Matthew Lewis)

By Herbert Lash

NEW YORK (Reuters) -The dollar rebounded further from last year’s sell-off and global stock markets extended a New Year slide on Wednesday as doubts about the chances of a soft landing mounted even as the Federal Reserve almost declared victory in taming inflation.

Policymakers appeared increasingly convinced last month that inflation was coming under control, but they expressed growing concern about “overly restrictive” monetary policy, minutes from the Fed’s Dec. 12-13 meeting show.

Richmond Fed President Thomas Barkin echoed similar optimism earlier in the day, saying a soft landing is “increasingly conceivable” as the Fed makes “real progress” toward subduing inflation without inflicting major damage on the jobs market.

But the minutes and Barkin’s remarks failed to shake off a dour mood in equity markets, with the major Wall Street indexes selling off after the leading German, French, Italian and Spanish stock indexes earlier closed down more than 1%.

The yield on benchmark 10-year Treasury notes briefly climbed above 4% as market optimism about deep interest rate cuts and their impact on the economy ebbed.

The recent dramatic easing in monetary policy is likely to result in a “no landing,” or continued above-trend growth that will limit how much the Fed can cut rates, said Phillip Colmar, global strategist at MRB Partners in New York.

“Fed rate cuts are not required, even if Powell & Co. are determined to provide them,” Colmar said in an email, adding that monetary and financial conditions have not been restrictive. “All major asset classes, including equities, suggest that monetary conditions are plentiful.”

MSCI’s gauge of stocks across the globe shed 0.94%, while the pan-European STOXX 600 index closed down 0.86%.

On Wall Street, the Dow Jones Industrial Average fell 0.76%, the S&P 500 lost 0.80% and the Nasdaq Composite dropped 1.18%. The market is trying to figure out if a soft landing is possible with the six rate cuts by year-end the futures market has priced in or whether that scenario will be painful, said Anthony Saglimbene, chief market strategist at Ameriprise Financial in Troy, Michigan.

“Usually when you get that type of aggressive interest rate cuts, it comes with more economic pain,” he said. “Our view is that the market has probably priced in too many rate cuts for this year.”

Fed officials in December predicted 75 basis points (bps) of rate cuts this year, driving money-market bets for around double that amount amid market optimism that spurred a year-end rally in stocks and bonds.

Resilience in the U.S. labor market has kept a recession at bay. The government is expected to report on Friday that nonfarm payrolls increased by 168,000 jobs in December, according to a Reuters survey of economists, after rising 199,000 in November.

But labor market conditions are gradually easing. U.S. job openings dropped by 62,000 to 8.79 million for the third straight month in November, the Labor Department said in its monthly Job Openings and Labor Turnover Survey, or JOLTS report.

“Today’s JOLTS data is another signal that the Fed is delivering a soft landing,” said Ron Temple, chief market strategist at Lazard, in an email.

But the report also suggests that the Fed is unlikely to cut rates as aggressively in 2024 as the market expects given the risk of reigniting inflationary pressures, he said.

Yields on government debt retreated after earlier edging higher. The yield on the 10-year Treasury note fell 3.3 basis points at 3.911%.

Germany’s 10-year Bund yield was down 1.7 basis points at 2.000%.

The dollar has gained more than 1% against major currencies this week, with the dollar index touching a fresh two-week high at 102.6 as rate-cut bets eased.

The euro fell 0.26% to $1.0919 and the yen weakened 0.89% at 143.25 per dollar.

Oil prices climbed about 3% after a disruption at Libya’s top oilfield added to fears that mounting tensions in the Middle East could disrupt global oil supplies.

Brent futures rose $2.36 to settle at $78.25 a barrel. U.S. West Texas Intermediate (WTI) crude rose $2.32 to settle at $72.70.

Gold retreated, on course for its largest percentage decline in over three weeks, after the Fed minutes flagged uncertainty about the timing of potential interest-rate cuts.

U.S. gold futures settled 1.5% lower, at $2,042.80.

Bitcoin sank roughly 5% after climbing to more than $45,000 a day earlier, its highest level since April 2022. Still, optimism about bitcoin remained high amid a possible approval this week of a spot exchange traded fund for the world’s largest cryptocurrency.

(Reporting by Herb Lash in New York, Naomi Rovnick and Dhara Ranasinghe in London and Stella Qiu in SydneyEditing by Chizu Nomiyama, David Evans and Matthew Lewis)

By David French

(Reuters) -U.S. stock indexes closed 2024’s second session down again in extended profit-taking on Wednesday after a strong end to 2023, with minutes from the Federal Reserve’s December meeting failing to shake off the funk hanging over markets.

Fed policymakers appeared increasingly convinced that inflation was coming under control, with “upside risks” diminished and growing concern about the damage that “overly restrictive” monetary policy might do to the economy, the minutes released on Wednesday showed.

The minutes shed little light on when rate cuts might commence.

“I don’t think there’s anything too shocking” in the minutes, said Garrett Melson, portfolio strategist at Natixis Investment Managers Solutions. Much of the messaging around rate cuts had already been previewed by Fed Chair Jerome Powell and other policymakers in recent weeks, he noted.

This included comments from Richmond Fed President Thomas Barkin, who said earlier on Wednesday that the U.S. central bank is “making real progress” towards taming inflation without inflicting major damage on the job market.

Investors have been cautious so far in 2024, wary of the central bank’s expected pivot to rate cuts this year and how quickly these might be implemented. This is especially after the blistering stock market rally at the end of 2023 extended valuation multiples.

The benchmark S&P 500 came within striking distance of its all-time closing high last week as signs of cooling inflation triggered investors to bet on an aggressive rate-cutting schedule. But Wall Street kicked off the new year on a dull note on Tuesday as Apple and other high-growth companies came under pressure from higher Treasury yields.

The negative trend persisted on Wednesday, with shares of rate-sensitive megacap stocks including Nvidia , Apple and Tesla finishing down.

“We’ve had quite the rally off the October lows, and a lot of indicators are screaming overbought, so it’s not surprising to see a little bit of a breather,” said Natixis’ Melson.

While the Fed is widely expected to keep rates on hold in January, traders have priced in a 67% chance of a 25 basis point rate cut in March, as per CMEGroup’s FedWatch tool.

According to preliminary data, the S&P 500 lost 38.68 points, or 0.82%, to end at 4,704.15 points, while the Nasdaq Composite lost 176.80 points, or 1.18%, to 14,589.14. The Dow Jones Industrial Average fell 289.73 points, or 0.77%, to 37,425.31.

Airline stocks came under pressure as a jump in oil prices, following disruption at Libya’s top oilfield, raised concerns about fuel costs. The S&P 1500 passenger airlines index tumbled. [O/R]

Higher crude prices supported the energy index, the leading gainer among the minority of S&P sectors in positive territory.

Financials was among the sectors that traded lower, with Charles Schwab and Blackstone among those pulling down the index. They dropped after Goldman Sachs downgraded the stocks to “neutral” from “buy.”

However, Citigroup gained for a second straight day as the bank continued to benefit from a price target upgrade and an upbeat analyst report from Wells Fargo released the previous day.

(Reporting by Sruthi Shankar and Shristi Achar A in Bengaluru and David French in New York; Editing by Shinjini Ganguli and Richard Chang)