Wall Street Wavers as S&P 500 Remains on Track for Worst Week Since April

NEW YORK – U.S. stocks fluctuated on Thursday as mixed economic data left investors uncertain about the market's direction. The S&P 500 dipped 0.1% in afternoon trading after two consecutive days of losses, while the Dow Jones Industrial Average fell 159 points, or 0.4%. The Nasdaq Composite, however, managed to rise by 0.4%.

Treasury yields remained relatively steady following the release of several economic reports. One report showed that U.S. companies slowed hiring in August, falling well short of economists’ forecasts for growth. However, fewer U.S. workers filed for unemployment benefits last week, indicating that layoffs remain low. Another report offered optimism, highlighting stronger-than-expected growth in key sectors such as mining, finance, and healthcare.

A survey from the Institute for Supply Management (ISM) supported this positive outlook, with one respondent stating, “Generally, business is good,” although concerns about slowing foot traffic in retail venues persisted.

Despite some encouraging data, stocks struggled throughout the week due to concerns over a slowing U.S. economy and its potential impact on corporate profits. This heightened attention on the U.S. jobs report due on Friday, which is expected to show an acceleration in hiring. The report is seen as crucial for the Federal Reserve’s interest rate decision, as it may influence the size of the anticipated rate cut later this month.

After maintaining its highest interest rate levels in two decades to combat inflation, the Federal Reserve is now considering rate cuts to protect the labor market and prevent a potential recession. However, there are concerns that these cuts may not be enough to stabilize the economy.

In the bond market, the yield on the 10-year Treasury note eased to 3.72% from 3.76% the previous day. The decline marks a significant move from its April peak of 4.70%. Investors are also watching the yield curve closely, as it flirts with the end of a more than two-year inversion—a phenomenon where shorter-term yields exceed longer-term yields. Historically, an inverted yield curve is viewed as a warning signal for an impending recession.

The two-year Treasury yield was 3.74%, just above the 10-year yield.

Corporate Highlights

Among individual stocks, Old Dominion Freight Line experienced one of the steepest losses within the S&P 500, dropping 5.5% after reporting lower-than-expected revenue for August. The company attributed the decline to weakness in the domestic economy and lower fuel surcharge revenue.

Verizon shares slipped 0.5% after announcing a $20 billion acquisition of Frontier Communications to expand its fiber network. Frontier shares, which surged 38% the day before, fell 9.1% following the news.

Tesla gained 5.2% after its artificial intelligence (AI) division presented a roadmap for developments, including plans for full self-driving technology in Europe and China.

JetBlue Airways soared 9.2% after raising its revenue forecast for the summer, citing strong performance in Latin America and increased business from competitors' flight cancellations in July. Other airlines also posted gains, with United Airlines up 2.9% and American Airlines rising 3.6%.

Global Markets

Internationally, stock markets were mixed. Japan’s Nikkei 225 fell 1.1% after strong wage growth data raised the likelihood of another interest rate hike.

Looking Ahead

As investors await Friday’s crucial jobs report, uncertainty looms over whether the Federal Reserve’s anticipated interest rate cut will be sufficient to safeguard the U.S. economy from recession. Meanwhile, oil futures remain volatile despite OPEC+ extending its output cuts, signaling a fragile balance between supply concerns and economic weakness.