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Investors are tightening their neck braces as US stocks rise up, fall back down and then do it again. Stock market volatility is at its worst level since July.

The whiplash-induced trip comes as conflicting data paints a cloudy picture about the state of the US economy. Investors have been reading economic reports like tea leaves, searching for signs that the Federal Reserve may soon pivot to counter a slower pace of inflation rate hikes, and reacting accordingly.

What is happening: The S&P 500 posted its worst performance in the first nine months of any year since 2002. September was particularly rough – with all three major US indices falling into a bear market.

October brought more vertigo as stocks quickly recovered. The S&P 500 gained 5.7% on Monday and Tuesday, the biggest two-day gain since April 2020. On Wednesday, stocks fell again before bouncing back a bit. They finished the day slightly lower.

This week’s strange swings correspond with two new data points that raised the possibility of a sustained pivot.

Markets were buoyed by news that the Reserve Bank of Australia raised interest rates by a quarter of a percentage point on Tuesday. That’s half what analysts expected.

The move led to speculation that the Fed might jump on the bandwagon and dial back its own rates.

That seems unlikely. “We’re starting to see some things the doves can hang their hat on, but I don’t think it will be enough to stop another 75 basis point move in November,” wrote Neil Dutta at Renaissance Macro Research in a note on Tuesday. .

Then, the number of vacancies in September fell sharply, falling below analyst expectations, according to Refinitiv data.

A weakened labor market puts it down pressure on wages and inflation. So while fewer job openings seem like a bad thing, they show that the Fed’s tightening system is working.

The Fed will see this as an “encouraging development,” analysts at Barclays wrote, but cautioned that it is just one piece of data among many. The labor market remains tight with about 1.7 job openings for every unemployed worker in the US.

Hope seemed to be fleeting, however. New private employment data Wednesday by payroll services firm ADP suggested the labor market isn’t losing any steam. Businesses beat estimates and 208,000 jobs were added in September. They added 185,000 jobs in August.

The disconnect: If it feels like we’ve been here before, it’s because we have.

Pivot-friendly thinking helped fuel the bear market crowd we saw in July and August. That didn’t last, and markets soon plummeted.

Fed officials have repeatedly said they plan to continue their policy of raising rate hikes and have publicly worried that markets are refusing to listen to their messages.

Panic and ecstasy are not investment strategies, and flicker is not a pivot.

What’s ahead: Expect more volatility as investors sell the latest unemployment data from the Bureau of Labor Statistics on Friday morning. The data measures the change in the number of people employed in September and is closely watched by the Fed. In this “good-means-bad” world of nutrition, rising unemployment is likely to drive stocks higher.

OPEC+ said on Wednesday it will cut oil production by 2 million barrels per day, the biggest cut since the pandemic began. It’s a move that risks pushing gasoline prices higher as Europe faces a heating crisis this winter and just weeks before the US midterm elections.

The reduction is equivalent to about 2% of global oil demand, reports my colleague Hanna Ziady. The group of major oil producers, including Saudi Arabia and Russia, together control more than 40% of global oil production.

The price of Brent crude rose 1.5% to more than $93 a barrel on the news, adding to gains this week ahead of the meeting of oil ministers. Oil prices were little changed early Thursday.

The rise in oil lifted energy stocks, which helped boost the overall market, reports Paul R. La Monica.

Chevron (CVX) was one of the top Dow stocks, rising nearly 1%. Exxon Mobil (XOM) and oil service giants Schlumberger (SLB) and Halliburton (HAL) were among the leaders in the S&P 500, with each stock gaining between 4% and 6%.

Elon Musk’s decision this week to move forward again with his deal to acquire Twitter could signal that former President Donald Trump is back on the scene, reports my colleague Donie O’Sullivan.

That gives Trump a double-edged sword.

The former president could regain access to the nearly 90 million Twitter followers he had before he was permanently banned from the platform two days after the January 6 attack on the Capitol. But it could do without Truth Social, the social media business created by Trump after his ban on Twitter.

Trump Media and Technology Group, which owns Truth Social, is in the middle of a controversial bid to go public through a merger with the blank check company Digital World Acquisition Corp. This news further complicates the merger.

DWAC shares fell more than 5% on Tuesday to $17.10, and remained close to that level on Wednesday. The stock peaked in 2022 around $97 in March. Twitter stock (TWTR) is up nearly 20% this week.

“I think it was wrong to ban Donald Trump; I think it was a mistake,” Musk said at a conference in May, vowing to reverse the ban if he owned the company.

Jack Dorsey, who was CEO of Twitter when the company banned Trump but has since left the company, responded to Musk’s comments by saying he agreed that there should not be permanent bans. He said Trump’s ban on “business decision” and “should not have.”

ConAgra, Constellation Brands, McCormick and Levi Strauss report earnings.

Plus: The US Department of Labor reports weekly jobless claims at 8:30 am ET.

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