U.S. stocks faltered on Thursday as investors digested further weaker-than-expected labor market data that could boost hopes for interest rate cuts and the health of the U.S. economy.

The S&P 500 (^GSPC) hovered around the flat line, while the Dow Jones Industrial Average (^DJI) fell 0.3%. The tech-heavy Nasdaq Composite (^IXIC) rose 0.3%, while all three benchmarks traded choppy. The indexes ended Wednesday’s volatile session mixed as their sluggish start to September continued.

Private employers in the U.S. posted the smallest monthly hiring gain since January 2021, new data from ADP showed Thursday. Private sector payrolls grew by about 99,000, well below expectations. Meanwhile, slightly fewer Americans filed new unemployment claims last week. On Wednesday, government data showed that the number of job openings has plummeted.

Together, the labor market data serve as a preview of Friday’s August employment report, which is key to the Fed’s monetary policy decisions and is being closely watched amid hopes for a “Goldilocks” economy.

Stock prices are fluctuating as the market is torn between conflicting impulses while data releases paint a gloomy picture of the economy. The latest weak numbers suggest even deeper rate cuts. But they could also be a sign that the US is on the brink of recession and a “soft landing” is no longer in sight.

Traders now believe there is a nearly 50-50 chance that the Federal Reserve will cut interest rates by 0.5% at its September meeting.

At the corporate level, earnings from HPE (HPE) and C3.ai (AI) shed some light on growth prospects in the AI ​​space. C3.ai shares slumped 20% after the enterprise AI software maker reported weak subscription revenue. HPE stock also slipped on profitability disappointment.