Stocks struggled on Thursday as investors dumped risky assets and concerns grew about the outlook for the U.S. economy ahead of Friday’s key jobs report.

The technology-heavy benchmark lost 0.1% after rising more than 1% earlier. S&P500 fell by 0.6%, while the Dow Jones Industrial Average lost 430 points or 1.1%.

“We are in the middle of another small growth scare,” said Arun Sai, chief multi-asset strategist at Pictet Asset Management.

New jobs data on Thursday sent mixed signals about the health of the U.S. economy as questions remain over whether the Federal Reserve is lagging in its interest rate cuts. Private payrolls data showed the weakest growth since 2021, heightening fears of a labor market slowdown. However, weekly jobless claims declined from the previous week.

The market has shown hypersensitivity to potential growth fears in recent weeks, including Tuesday’s sell-off on weak manufacturing data. This is leading to increased attention on jobs data, with all eyes on the August nonfarm payrolls report on Friday. A weak July report released last month stoked recession fears and a spate of volatility in August.

“Any further weakness in the labour market will come at a price,” said Pictet’s Sai. “If the labour market continues to weaken, this will be accompanied by weaker demand, and that is not reflected in equity prices.”

Tesla rose 4% after the electric vehicle maker announced it plans to launch its fully autonomous driving software in Europe and China early next year. Border communication fell by 8% after Verizon said it would buy the company in a $20 billion deal that kept the value below Wednesday’s closing price. Verizon rose 0.3 percent.

Thursday’s moves come after the S&P 500 and Nasdaq Composite closed lower for the second consecutive day. Dow made a small gain. All three averages are declining for the week ahead of Friday’s report on August nonfarm payrolls.