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U.S. equity futures traded mixed Thursday as traders look to close the books on the worst moth of the year for the S&P 500 ahead of a key inflation reading and further job market data heading into Friday’s crucial August employment report. 

The S&P 500, which is down around 1.6% for the month, has nonetheless been riding a four-day winning streak thanks in part to a pullback in Treasury bond yields tied to so-called ‘Goldilocks’ jobs and GDP data that indicate a cooling, but not cold, domestic economy.

Second quarter GDP growth was estimated modestly lower, at 2.1% from a prior reading of 2.5%, while the closely-tracked GDP deflator, which feeds into Federal Reserve rate forecasts, eased to 2%, the lowest in three years.

That could tame inflation pressures over the coming months, and in turn pare bets on near-term Fed rate hikes, as slowing wage and hiring gains take the foot off the gas of consumer spending.

“The most recent batch of data shows an economy that’s still strong, but not overheating,” said David Russell, global head of market strategy at TradeStation. “The misses on JOLTs and ADP take some pressure off Fed officials worried about wage inflation. And today’s downward GDP revision removes some of the rationale for August’s run-up in Treasury yields.”

“The lower core PCE price index also shows inflation trending the way policymakers want,” he added. “Weaker employment and cooler prices keep the Goldilocks narrative on track.”

Treasury bond yields have been the first to reflect that change, with benchmark 10-year note yields retreating some 25 basis points from the 2007 highs it touched last week to trade at around 4.102% in the overnight session.

Benchmark 2-year notes, the most-sensitive to changes in interest rate forecasts, have fallen firmly below the 5% mark, and currently trade at around 4.869%, as traders pare bets on a final Fed rate hike between now and the end of the year.

Stocks will likely continue to track Treasury yields into the open, with a July reading of the Fed’s preferred measure of inflation, the core PCE price index, as well as weekly jobless claims data due at 8:30 am Eastern time.

On Wall Street, futures contracts tied to the S&P 500 are priced for a modest 4 point gain while those linked to the Dow Jones Industrial Average are indicating a 128 point jump. Futures tied to the Nasdaq are indicating a modest 16 point pullback. 

Overnight in Asia, Japan’s Nikkei 225 extended its recent rally to a fourth consecutive session, thanks in part to solid performances in automotive stocks, while the region-wide MSCI ex-Japan benchmark slipped 0.46% into the close of trading.

In Europe, the Stoxx 600 was marked 0.11% higher in early Frankfurt dealing, powered in part by bank stocks as UBS shares traded at the highest levels since 2008 following a record second quarter profit and deeper cost cuts tied to its government-led acquisition of Credit Suisse earlier this year.

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