MARKET SNAPSHOT

U.S. stocks were mixed ahead of the August payrolls report which investors expect to influence the size of an almost certain Fed rate cut later this month. Treasury yields declined and the yield curve inversion survived as markets digested economic data. Oil futures edged lower as soft demand outweighed support from an extension of OPEC+ output cuts. Gold prices posted modest gains as the dollar weakened moderately.

MARKET WRAPS

EQUITIES

Fresh signs that the labor market could be weakening pushed bond yields and the S&P 500 lower Thursday ahead of a pivotal jobs report.

Investors and analysts were awaiting the Labor Department's August jobs data for clues on how much the Federal Reserve might cut interest rates at its meeting later this month. With price pressures easing, Fed Chair Jerome Powell has signaled the central bank will start cutting rates to prevent any further weakening in the labor market

The S&P 500 shed 0.3%, trimming its advance for the year to 15%. The Dow Jones Industrial Average declined 0.5%. The tech-dominated Nasdaq Composite ended 0.3% higher.

A particularly bleak jobs report Friday would help make the case for a larger rate cut this month, said Megan Horneman, chief investment officer at Verdence Capital Advisors. But the economic benefits of lower borrowing costs could be overshadowed by concern that the Fed waited too long, she said.

"This is one of those situations where bad news is actually bad news," she said.

Earlier Thursday, Chinese shares ended mostly higher, supported by real-estate and insurance stocks. Citi thinks that China's property sector is entering a period of sustained recovery.

The benchmark Shanghai Composite Index edged 0.1% higher, the Shenzhen Composite Index added 0.5% and the ChiNext Price Index rose 0.7%. Hong Kong's Hang Seng Index, however, slipped 0.1%, weighed by energy stocks amid demand concerns.

Japan's Nikkei Stock Average shed 1.1%. Solid wage data supported expectations for further rate increases by the Bank of Japan.

Australia's S&P/ASX 200 gained 0.4%, steadying from a hefty drop in the prior session as shares of banks, property trusts and tech providers made gains.

New Zealand's NZX-50 added 1% as shares in infrastructure investor Infratil jumped following Blackstone's $16 billion acquisition of a regional data-center operator.

COMMODITIES

Oil futures finished lower, pressured as signs of soft demand outweighed support from a decision by the Organization of the Petroleum Exporting Countries and its allies to extend voluntary production cuts to the end of November.

The oil producers essentially scrapped plans that would have led to a gradual output increase starting next month, but recent downbeat economic data and a weekly decline in U.S. gasoline consumption fed ongoing worries about the outlook for energy demand.

West Texas Intermediate crude for October delivery declined by nearly 0.1% to settle at $69.15 a barrel on the New York Mercantile Exchange. November Brent crude lost a penny to settle at $72.69 a barrel on ICE Futures Europe.

Oil prices were "out of touch with the current supply and demand realities that we're seeing in the numbers," said Phil Flynn, senior market analyst at The Price Futures Group. The market seems to be very concerned about Friday's U.S. jobs report and the "potential that the U.S. economy may be slowing more than advertised."

Front month Comex gold for September delivery gained 0.7% to settle at $2511.40 per troy ounce.

TODAY'S TOP HEADLINES

ADP says businesses add just 99,000 new jobs. Slowdown in hiring points to softer economy.

The numbers: U.S. businesses generated just 99,000 new jobs in August, paycheck company ADP said, to mark the smallest increase since 2021 in another sign of a rapidly cooling labor market.

"The job market's downward drift brought us to slower-than-normal hiring after two years of outsized growth," said Nela Richardson, chief economist of ADP.

Economists polled by the Wall Street Journal had forecast a gain of 140,000.

Bank of America Shared Nonpublic Information With Investors in India, Whistleblower Says

Bank of America is investigating allegations that bankers in Asia shared nonpublic information with investors before the bank sold hundreds of millions of dollars worth of stock.

The whistleblower complaint alleged that bankers shared transaction details with investors before a stock sale in India was announced this spring, according to a copy of the complaint reviewed by The Wall Street Journal-potentially enabling the investors to engage in what is known on Wall Street as "front running."

Sharing nonpublic information ahead of a major sale of publicly traded stock is illegal in many countries because it can give the recipients an advantage over others. Investors with advance knowledge could "front run" bets on how shares would perform and profit if the market moved as predicted. The practice is illegal in India, and sharing nonpublic information about deals is prohibited under Bank of America's policies.

EU Aviation Safety Agency Calls for A350 Inspections After Cathay Pacific Engine Trouble

The European Union's aviation safety agency called for inspections to be carried out on Airbus A350 model planes after Hong Kong-based airline Cathay Pacific discovered earlier this week that engine components on some of its planes required replacement.

The bloc's aviation safety agency said in a statement that it was taking precautionary measures and requiring a "one-time fleet inspection, which may be applicable only to a portion of the A350 fleet, in order to identify and remove from service any potentially compromised high pressure fuel hoses."

The inspections come after 15 Cathay Pacific A350 planes were found to have engine fuel lines in need of replacement, according to the airline. Cathay Pacific said that six of those planes had undergone repairs and were cleared to resume flying so far.

Japan Bid for U.S. Steel Runs Up Against U.S. Politics

Japan's biggest steelmaker hoped it could counter China's export onslaught with a deal in the U.S., where it would enjoy protection from Chinese rivals. Instead, it found U.S. politics was an equally challenging foe.

The already-slim prospects for Nippon Steel's $14 billion proposed takeover of U.S. Steel have narrowed further with President Biden poised to use his executive powers to block the deal, according to a person familiar with the matter.

Like many steelmakers in Asia and around the world, Nippon Steel has been hammered by Chinese competition. China is flooding global markets with steel it doesn't need at home because of a real-estate bust, and it is stepping up supply of minerals in which it holds dominant positions. That has helped push down prices.

Verizon Strikes $9.6 Billion Deal for Frontier

Verizon Communications agreed to buy back some of the fiber-optic lines it sold off nearly a decade ago through a $9.6 billion deal for Frontier Communications.

The all-cash deal, announced Thursday, offered $38.50 a share for Frontier investors. The companies said it was valued at $20 billion including acquired debt. The Wall Street Journal reported Wednesday that the companies were in advanced talks.

Frontier, cobbled together by several deals over the years, has more than 2 million fiber-optic connections across 25 states. Folding its network into Verizon would reach a combined 10 million fiber-optic customers in the Northeast and Midwest as well as in California, Texas and Florida-three markets that Verizon sold to Frontier in 2016.