Market Volatility as Investors Await Crucial Jobs Data

The S&P 500 and Dow Jones declined in volatile trading, while the Nasdaq saw slight gains. Economic reports initially buoyed the market but failed to sustain momentum. Investors are keenly awaiting the nonfarm payrolls data set for release, which is expected to guide Federal Reserve's interest rate decisions.

The benchmark S&P 500 index and the Dow slipped in choppy trading on Thursday after a short-lived boost from a string of economic reports faded and investors eyed key jobs data due on Friday. The Nasdaq traded 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. Eight out of 11 S&P 500 sectors lost ground, led by declines in healthcare and industrial stocks. The consumer discretionary sector led the gainers, driven partly by Tesla.

"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." The Dow Jones Industrial Average fell 160.92 points, or 0.39%, to 40,814.05, the S&P 500 lost 8.61 points, or 0.16%, to 5,511.53 and the Nasdaq Composite gained 65.72 points, or 0.38%, to 17,150.02.

(With inputs from agencies.)