All three major U.S. stock indexes oscillated slightly between red and green on the penultimate trading day of August, which remains on track to mark the S&P 500's .SPX biggest monthly percentage drop since February, and the tech-laden Nasdaq's .IXIC largest slide this year.
A barrage of economic indicators generally surprised to the downside, including private payrolls clocking a 52.3% monthly drop and second-quarter GDP revised significantly lower, to 1.7% on a quarterly annualized basis.
Ironically, weak economic data could be good news for interest rates, as it could give the Federal Reserve a rationale for letting key interest rates stand at next month's monetary policy meeting.
"The data was the kind of disappointing that markets want to see," said Thomas Martin, senior portfolio manager at GLOBALT in Atlanta. "It came in weaker than consensus, but it wasn’t too weak, and it fits with the idea that central banks have another data point that makes them more comfortable with holding steady rather than opting for further rate increases."
Financial markets have currently priced in a 90.5% likelihood of a September Fed pause, according to CME's FedWatch tool.
The Dow Jones Industrial Average .DJI fell 5.16 points, or 0.01%, to 34,847.51, the S&P 500 .SPX gained 6.28 points, or 0.14%, to 4,503.91 and the Nasdaq Composite .IXIC added 32.32 points, or 0.23%, to 13,976.08.
Across the Atlantic, European stocks were easing off a two-week high as weakness in the utilities sector was countered by gains in insurance and basic resources.
The pan-European STOXX 600 index .STOXX lost 0.13% and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.35%.
Emerging market stocks rose 0.15%. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.46% higher, while Japan's Nikkei .N225 rose 0.33%.
The greenback extended its losses against a basket of world currencies in the wake of disappointing economic data.
The dollar index .DXY fell 0.53%, with the euro EUR= up 0.51% to $1.0932.
The Japanese yen weakened 0.03% versus the greenback at 145.94 per dollar, while Sterling GBP= was last trading at $1.2718, up 0.63% on the day.
U.S. Treasury yields slipped after data showed slower-than-expected economic growth, which further lowered expectations of interest rate hikes in the next few months.
Benchmark 10-year notes US10YT=RR last rose 3/32 in price to yield 4.11%, from 4.122% late on Tuesday.
The 30-year bond US30YT=RR last rose 1/32 in price to yield 4.235%, from 4.237% late on Tuesday.
Crude prices heated up as industry data showed a large inventory draw even as Hurricane Idalia made landfall in Florida, a region responsible for about 15% of U.S. oil output.
U.S. crude CLcv1 rose 0.8% to $81.81 per barrel and Brent LCOcv1 was last at $86.15, up 0.77% on the day.
Gold prices advanced in opposition to weakness in the U.S. dollar.
