S&P 500, Dow End Lower Ahead of Key Jobs Data

The benchmark S&P 500 index and the Dow ended lower in choppy trading Thursday after a short-lived boost from a string of economic reports faded and investors eyed key jobs data due on Friday. The Nasdaq finished slightly higher.

Markets were edgy ahead of the release of the comprehensive nonfarm payrolls data - which will likely set the stage for the Federal Reserve to begin cutting rates later this month.

Earlier in the session, Wall Street's main indexes gained as reports helped allay concerns of labor market deterioration. The Institute for Supply Management survey showed services sector activity expanded in August while jobless claims declined last week, according to Labor Department data.

"The markets have been on this risk-on risk-off roller coaster because it's watching the data as the Fed has said 'we're going to watch the data,'" said Wasif Latif, president and chief investment officer at Sarmaya Partners in Princeton, New Jersey. "The market is watching the data to get a sense of what the economy is looking like in terms of the landing scenario and what that means for interest rate policy from the Fed."

September has been historically weak for U.S. equities, with the S&P 500 down about 1.2% for the month on average since 1928. The index is down more than 2% so far this week and tech stocks have fallen over 4%.

In August, U.S. private employers hired the fewest workers since January 2021 and data for the prior month was revised lower, potentially hinting at a sharp labor market slowdown, according to the ADP National Employment Report.

"The market wants some softness in the data, but it's like a narrow pathway because the equity market in our view is priced for a soft landing or a no landing scenario whereas the bond market, given the rate cut expectations, is bit more priced for a recession," Latif added.

According to preliminary data, the S&P 500 lost 16.39 points, or 0.30%, to end at 5,503.68 points, while the Nasdaq Composite gained 42.15 points, or 0.25%, to 17,126.45. The Dow Jones Industrial Average fell 222.05 points, or 0.54%, to 40,752.92.

Tesla gained after the electric-vehicle maker said it will launch its full self-driving advanced driver assistance software in the first quarter next year in Europe and China, pending regulatory approval.

Frontier Communications fell sharply after Verizon said it would buy the company in an all-cash deal worth $20 billion. Verizon shares dropped.

JetBlue Airways jumped after the carrier raised its third-quarter revenue forecast.