By Sinéad Carew and Tom Wilson

NEW YORK/ LONDON (Reuters) – MSCI’s global equities gauge fell for a third consecutive day, with oil prices losing ground on Wednesday. Safe-haven assets like U.S. Treasuries and Japan’s yen gained demand amid mixed economic data, raising concerns about slowing growth.

Crude oil futures dropped more than 1% for the third straight day, suffering over a 4% loss on Tuesday due to fears about upcoming demand.

U.S. Treasuries saw lower yields, with the closely watched yield curve between two-year and 10-year notes turning positive after data revealed that U.S. job openings fell to a 3.5-year low in July.

On Tuesday, Wall Street stock indexes recorded their largest daily percentage drops since early August as investors took profits and weak U.S. manufacturing data provided little risk appetite boost.

The S&P 500 closed lower on Wednesday after fluctuating throughout the morning. Investors awaited more economic data, including a reading on the U.S. services industry and jobless claims. Friday’s anticipated August nonfarm payrolls report is expected to provide significant insights into the U.S. economy’s health and the Federal Reserve’s potential interest rate cuts this month.

Anthony Saglimbene, chief market strategist at Ameriprise Financial, noted, “In a historically weak month for stocks, investors are acting more cautiously regarding the growth outlook than inflation.”

Wednesday’s data was mixed. A Commerce Department report indicated that U.S. manufactured goods orders increased more than expected in July, bolstered by defense aircraft, while overall demand remained moderate due to high borrowing costs.

The decrease in U.S. job openings in July to their lowest since January 2021 pointed to a less robust labor market, leading traders to increase bets that the Fed may implement a half-percentage-point interest rate cut at its upcoming meeting.

Saglimbene expressed concerns that a 50 basis point cut now might suggest more significant than expected economic slowing, indicating that the Fed could be lagging.

Additionally, Atlanta Federal Reserve President Raphael Bostic warned against keeping interest rates too high for too long to avoid harming employment.

On Wall Street, the Dow Jones Industrial Average rose 38.04 points, or 0.09%, to 40,974.97. The S&P 500 fell 8.86 points, or 0.16%, to 5,520.07. The Nasdaq Composite lost 52.00 points, or 0.30%, to 17,084.30. MSCI’s global stock gauge dropped 4.40 points, or 0.54%, to 815.07, with Europe’s STOXX 600 index down 0.97%.

In foreign exchange markets, the dollar fell against most major currencies as the July job openings data increased the likelihood of larger U.S. rate cuts. The yen gained from a safe-haven bid.

The dollar index, reflecting the greenback against a basket of currencies including the yen and euro, was down 0.39% at 101.30. The euro increased by 0.34% to $1.108, while the dollar weakened by 1.17% to 143.77 against the yen.

Marc Chandler, chief market strategist at Bannockburn Global Forex, noted that stock market instability and declining U.S. yields bolstered the yen’s strength.

In Treasuries, the yield on benchmark U.S. 10-year notes fell 8.9 basis points to 3.755%, down from 3.844% late Tuesday. The 2-year note yield dropped 12.8 basis points to 3.76%.

The U.S. Treasury yield curve, a key economic indicator, was at a negative 0.7 basis points.

Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets, emphasized that Friday’s payroll report would significantly influence market expectations for Fed policy, with employment data now overshadowing inflation concerns.

Crude oil prices declined due to pessimism about future demand, with oil producers sending mixed signals about supply increases. Lackluster data from the U.S. and China heightened expectations of a weaker global economy.

U.S. crude settled down 1.6% at $69.20 a barrel, while Brent ended 1.4% lower at $72.70 per barrel.

Gold prices rose slightly, aided by a weaker dollar and lower yields following the poor U.S. job openings data. Spot gold inched up 0.07% to $2,494.43 an ounce.