The New York Stock Exchange closed lower on Friday, spooked by the announcement of an extended shutdown of Europe’s Nord Stream natural gas pipeline, raising fears of an escalating energy crisis and a recession in the Old World.
The Dow lost 1.07% to 31,318.44, the Nasdaq lost 1.31% to 11,630.86 and the broader S&P 500 lost 1.07% to 3,924.26. The Nasdaq fell for the sixth straight session this time, marking a losing streak in more than three years.
Briefing.com’s Patrick O’Hare noted, “You can make a direct link between Gazprom news and a market downturn.” “This adds an element of uncertainty. »
The group on Friday announced an extension to the shutdown of Nord Stream, which supplies most of Europe’s Russian gas supply, citing the need to repair faulty turbines.
After three days of maintenance, the pipeline was due to resume deliveries on Saturday.
“Europe is already in a weak economic situation, so the market is clearly seeing (in this news) an exacerbating factor,” explained Bill Nossi of Bank of America Wealth Management.
However, investors showed some optimism at the start of the meeting after the monthly U.S. jobs report, according to which 315,000 jobs were created in August, down significantly from July’s 526,000 new jobs.
In another sign of a slowdown, the unemployment rate edged up to 3.7% from 3.5% the previous month.
“Unemployment is rising because the job market can’t absorb all the people[starting looking for jobs],” said Jamie Cox of Harris Financial Group. “And the rise in wages has finally subsided. These are the best possible signs of a soft landing.»
“If the next CPI (price index) shows that inflation continues to decelerate at a more sustained pace, a 0.75 percentage point hike (the U.S. central bank’s key rate) may be more welcome,” LPL Financial’s Quincy Krosby expects to do.
Carriers now attribute a 44% probability to an increase of half a percentage point, compared to just 25% the day before.
Gazprom’s announcement pushed investors into assets deemed safer, and the combination of the possibility of a less brutal Fed boosted bond markets. Ten-year U.S. government bond yields, which moved in the opposite direction of prices, fell to 3.18% from 3.25% the previous day.
On the stock front, “we gave in to the cautious mood throughout the week,” noted Bil Northey.
In this risk-off atmosphere, the most volatile stocks in the ratings fell first, from Tesla (-2.51%) to Block (-3.52%), via Shopify (-3.71%) or Meta (-3.05%), and now Is flirting with the lowest level of the year.
Wall Street reacted poorly to the appointment of Laxman Narasimhan as Starbucks’ new CEO (-2.88% to $82.94), to replace iconic leader Howard Schultz next April.
Industrial conglomerate 3M (-3.17% to $121.65), whose title price fell to its lowest level in nearly nine years, was embroiled in a case of poor workmanship of earbuds intended for military use.
A group of soldiers took federal justice to stem the split between health activism and other groups, announced in July, as well as paying dividends, pending resolution of the dispute.
Better-than-analyst results boosted semiconductor maker Broadcom (+1.67% to $500.22), which also surprised the market with its forecast.
On the other hand, graphics card maker Nvidia continued to fall (-2.08% to $136.47) after its first pause the previous day. Uncertainty remains about exports of some of the group’s graphics processors to China, with U.S. authorities saying they want to restrict China before making changes.
Sportswear chain Lululemon jumped (+6.70% to $314.17) after reporting better-than-expected quarterly results and an ambitious forecast. The group has maintained profit margins despite inflation and has not been affected by a slowdown in demand that has affected other brands.
Connected exercise bike and treadmill maker Peloton fell (-8.17% to $9.44) after UBS analysts cut their recommendations.