More Americans are finding work. That's great news, and stocks soared Wednesday morning, thanks to it. But the Federal Reserve threw some cold water on the bulls by the end of the day.
The Dow surged nearly 200 points Wednesday after payroll processor ADP issued a strong jobs report about the private sector. That's raising hopes that the official government figures that will come out Friday morning will also show healthy job gains.
But the market pulled back and gave up nearly all of its gains by the end of the day after minutes from the Federal Reserve showed that some members of the central bank felt that stocks were "quite high."
Still, more jobs gains could help the market. And ADP said that 263,000 jobs were added in March, well ahead of forecasts for about 175,000.
Both ADP and the government reported solid jobs gains for February. So investors appear to be banking that the momentum in the labor market will continue.
Despite Wednesday's topsy-turvy trading, the market appears to be back on solid footing after a recent dip following President Trump's failure to push forward on a deal to repeal and replace Obamacare.
But investors have expressed hope that Trump will be able to get a tax reform plan approved and possibly a big economic stimulus plan aimed at rebuilding roads, bridges and other infrastructure.
Related: Jamie Dimon compares Trump to an airline pilot. You have to root for him
Bank stocks rallied early Wednesday as well, after Trump reiterated plans Tuesday to try to undo parts of the Dodd-Frank financial reform law.
JPMorgan Chase (JPM) CEO Jamie Dimon also said in his annual shareholder letter Tuesday that regulations are holding the economy back.
Related: Big Oil could be ready for a big comeback
The recent stock rally has helped push tech stocks like Apple (AAPL), Amazon (AMZN) and Microsoft (MSFT) to all-time highs. The Nasdaq, which is home to these three as well as Facebook (FB) and Google parent Alphabet (GOOGL), again hit a new record earlier Wednesday.
The Nasdaq is now up almost 10% so far this year and is approaching the 6,000 milestone.
And CNNMoney's Fear & Greed Index, which measures seven indicators of market sentiment, has bounced back from the Fear levels that it hit just a week ago.
It's now in Neutral mode and has inched closer to Greed. A great jobs number Friday might push the index back to Greed -- and lift stocks even higher.
But a solid jobs report might also make the Fed more likely to step up its pace of rate hikes. And Wall Street would not like that.
