ETFs Mixed as Market Awaits Labor Report

Stocks struggled Thursday as investors shed risk assets ahead of Friday’s crucial labor report. ETFs saw mixed performance, reflecting market uncertainty about the U.S. economic outlook and future Federal Reserve policy. 

The Invesco S&P 500 Equal Weight Communication Services ETF (RSPC) fell 0.7% as Frontier Communications tumbled 9%. 

This drop came after Verizon announced a $20 billion all-cash deal to acquire the fiber-optic provider, following Wednesday’s 38% surge on deal speculation. 

AI-focused ETFs faced pressure, with the Themes Generative Artificial Intelligence ETF (WISE) declining 0.4%. This followed news that C3.ai shares plummeted over 8% on weaker-than-expected subscription revenue. 

The YieldMax Ultra Option Income Strategy ETF (ULTY) also fell, dropping 1.7%. The ARK Innovation ETF (ARKK) bucked this trend, rising 1.2% on positive news from two major holdings. 

Roku shares climbed nearly 5% after an upgrade to equal weight at Wells Fargo. Tesla jumped 4.3% after announcing plans to roll out its advanced driver assistance technology in Europe and China next year.

Stock ETFs tumbled as a jobs report showed cooling hiring, sparking fresh concerns about whether the economy is on shaky ground or headed for the widely hoped-for soft landing.

Payroll company ADP reported 99,000 new private, nonfarm jobs in August, well below the 140,000 expectation and trailing July's 111,000. Professional and business services lost 16,000 positions, the report said. Hiring was "slower-than-normal," ADP's chief economist Nela Richardson said in the report.

At the same time, weekly claims for unemployment benefits of 227,000 were also more than the expected 230,000.

The decline in the 30-stock SPDR Dow Jones Industrial Average ETF Trust (DIA) accelerated, falling 0.8% at noon. The S&P 500 tracking iShares Core S&P 500 ETF (IVV) declined 0.5%.

Bond funds benefitted from the uncertainty in equities with the iShares 20+ Year Treasury Bond ETF (TLT) adding 0.1%. The iShares Core U.S. Aggregate Bond ETF (AGG) and the Vanguard Total Bond Market ETF (BND) added slightly less than 0.1%.

Crypto ETFs continued their declines with the Grayscale Bitcoin Trust (GBTC) shedding 3.5% as the price of the largest digital currency sank.