NEW YORK, Aug 30 — Wall Street wavered and the dollar extended its losses today, as a slew of disappointing economic data raised the probability that the Federal Reserve will press the pause button in its efforts to rein in inflation.

All three major US 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 biggest monthly percentage drop since February, and the tech-laden Nasdaq’s largest slide this year.

A barrage of economic indicators generally surprised to the downside, including private payrolls clocking a 52.3 per cent monthly drop and second-quarter GDP revised significantly lower, to 1.7 per cent 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 per cent likelihood of a September Fed pause, according to CME’s FedWatch tool.

The Dow Jones Industrial Average fell 5.16 points, or 0.01 per cent, to 34,847.51, the S&P 500 gained 6.28 points, or 0.14 per cent, to 4,503.91 and the Nasdaq Composite added 32.32 points, or 0.23 per cent, 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 lost 0.13 per cent and MSCI’s gauge of stocks across the globe gained 0.35 per cent.

Emerging market stocks rose 0.15 per cent. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.46 per cent higher, while Japan’s Nikkei rose 0.33 per cent.

The greenback extended its losses against a basket of world currencies in the wake of disappointing economic data.

The dollar index fell 0.53 per cent, with the euro up 0.51 per cent to US$1.0932 (RM5.07).

The Japanese yen weakened 0.03 per cent versus the greenback at 145.94 per dollar, while Sterling was last trading at US$1.2718, up 0.63 per cent on the day.

US 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 last rose 3/32 in price to yield 4.11 per cent, from 4.122 per cent late on Tuesday.

The 30-year bond last rose 1/32 in price to yield 4.235 per cent, from 4.237 per cent late yesterday.

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 per cent of US oil output.

US crude rose 0.8 per cent to US$81.81 per barrel and Brent was last at US$86.15, up 0.77 per cent on the day.

Gold prices advanced in opposition to weakness in the US dollar.

Spot gold added 0.5 per cent to US$1,945.99 an ounce. — Reuters —