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Wall Street is eyeing what could be the most consequential economic data report in months due out Friday.

Inflation has cooled significantly since the Federal Reserve began aggressively hiking interest rates more than two years ago to tame it. That’s led the central bank to shift its focus to the other side of its dual-mandate: maximizing employment.

Fed Chair Jerome Powell said last month that “the time has come for policy to adjust,” all but cementing a rate cut in September. Now, it’s just a question of whether the central bank will ease rates by a quarter- or half-point later this month.

Friday’s jobs data will be critical in that determination. At the same time, Wall Street is looking for signs that the job market is cooling steadily, rather than plummeting into conditions for a recession. Economists project that US employers added 160,000 jobs and that the unemployment rate ticked down to 4.2% in August, according to FactSet consensus estimates.

Preliminary data has shown that the job market is continuing to cool. Payroll processor ADP reported Thursday that hiring cooled more than expected in the US private sector, with businesses adding just 99,000 jobs last month.

“We’re in a ‘good news is good, and bad news is bad’ environment, and markets are still trying to figure out if the economy is slowing too much, and whether the Fed is behind the curve,” wrote Christopher Larkin, managing director of Morgan Stanley’s digital brokerage product E*Trade, in a Thursday note.

That uncertainty has been palpable in recent days as Wall Street parsed several economic reports before Friday’s main event. Stocks were lower Thursday midday and on pace to end the week lower. The Dow has fallen 2.3% this week, while the S&P 500 and Nasdaq Composite have lost 2.8% and 3.6%, respectively.

On Tuesday, all three major US indexes logged their worst day since last month’s global markets rout. That was after a new report from the Institute for Supply Management revealed economic activity in the manufacturing sector contracted in August for the fifth consecutive month in August, renewing fears that the US economy is on shaky footing.

Stocks struggled to find direction on Wednesday after fresh data revealed that job openings fell in July for the second-straight month to an estimated 7.67 million, down from 7.91 million in June and marking their lowest level since January 2021.

“Against this backdrop, it’s very easy for equity markets to react adversely to even the slightest piece of perceived bad news,” wrote BeiChen Lin, investment strategist at Russell Investments, in a note this week.

Big Tech shares gained Thursday, but suffered steep losses earlier this week. Artificial intelligence titan Nvidia’s steep losses have also helped drag down the market this month. The chipmaker on Tuesday shed $279 billion of market value on Tuesday alone. The stock has tumbled 10.3% this week as investors grow uncertain about whether or not the stock has more room to run and whether corporations’ hefty investments in AI products and technology will contribute to their bottom lines.

Shares of other tech heavyweights have also fallen. Alphabet shares have dropped 4% this week, Apple shares have tumbled 2.9%, Meta Platforms shares have lost 1.2%, Amazon shares have declined 0.8% and Microsoft shares have fallen 2.5%. Tesla, the only Magnificent Seven tech stock up for the week, has jumped 6.3%.

Elsewhere, oil prices rose Thursday but are still lower for the week on concerns about weakening demand in China. Brent crude futures, the international benchmark for oil, have declined 5%. West Texas Intermediate crude futures, the US benchmark, shed 5.4%.

This is a developing story and will be updated.