The New York Stock Exchange ended lower on Friday, spooked by the announcement of the extension of the shutdown of the Nord Stream gas pipeline in Europe, which raised fears of an escalation of the energy crisis and a recession on the Old Continent.
The Dow Jones lost 1.07%, to 31,318.44 points, the Nasdaq index, 1.31%, to 11,630.86 points, and the broader S&P 500 index, 1.07%, to 3,924.26 points. . The Nasdaq chained, on this occasion, a sixth consecutive session of decline, a sequence more seen for more than three years.
“You can make a direct link between the Gazprom news” and the market downturn, pointed out Patrick O’Hare of Briefing.com. “It adds a factor of uncertainty.”
The group announced on Friday the extension of the shutdown of Nord Stream, which provides most of Europe’s supplies of Russian gas, citing the need to repair a faulty turbine.
The pipeline was originally scheduled to resume deliveries on Saturday, after three days of maintenance.
“Europe is already in a weakened economic situation, so the markets clearly see (in this news) an aggravating factor,” explained Bill Northey, of US Bank Wealth Management.
Investors, however, showed some optimism at the start of the session, after the publication of the monthly US employment report, according to which 315,000 jobs were created in August, significantly less than the 526,000 new jobs in July.
Another sign of a slowdown, the unemployment rate rose slightly to 3.7%, against 3.5% the previous month.
“The unemployment rate went up because the job market couldn’t absorb all the people who (were starting to look for a job),” observed Jamie Cox of Harris Financial Group. “And the rise in wages eventually subsided. These are the best signals that a soft landing (of the economy) is possible.”
“If the next CPI (price index) shows that inflation continues to decelerate at a more sustained pace, a half-point hike (in the US central bank’s key rate) could be preferred to the more offensive one. , by 0.75 points”, anticipated Quincy Krosby, of LPL Financial.
Operators now attribute a probability of 44% to an increase of half a point, against only 25% the day before.
Gazprom’s announcement, which pushed investors towards assets considered safer, combined with the possibility of a less brutal Federal Reserve (Fed), boosted the bond market. The yield on ten-year US government bonds, which moves in the opposite direction to their price, eased to 3.18%, against 3.25% the day before.
On the equities side too, “we succumbed to the feeling of caution which dominated the whole week”, noted Bil Northey.
In this climate of risk aversion, the most volatile values on the rating fell first, from Tesla (-2.51%) to Block (-3.52%), via Shopify (-3.71 %) or Meta (-3.05%), which is now flirting with its lowest level of the year.
Wall Street reacted badly to the appointment of Laxman Narasimhan as new CEO of Starbucks (-2.88% to 82.94 dollars), replacing the emblematic leader Howard Schultz next April.
The price of the title of the industrial conglomerate 3M (-3.17% to 121.65 dollars) fell to its lowest level for almost nine years, entangled in a case of poor workmanship of earplugs intended for the military.
A group of soldiers took federal justice to block the split between health activities and the rest of the group, announced in July, as well as the payment of dividends, pending the settlement of this dispute.
The results above the analysts’ consensus boosted the semiconductor manufacturer Broadcom (+1.67% to 500.22 dollars), whose forecasts also positively surprised the market.
On the other hand, the graphics card manufacturer Nvidia continued its decline (-2.08% to 136.47 dollars) after a first stall the day before. Uncertainty remained as to the exports of certain graphics processors of the group to China, which the American authorities indicated that they wanted to restrict, before doing an about-face.
The sportswear chain Lululemon pranced (+6.70% to $314.17) after the publication of better-than-expected quarterly results and ambitious forecasts. The group has preserved its margins despite inflation and is not suffering from the slowdown in demand which is affecting other brands.
The manufacturer of connected exercise bikes and treadmills Peloton fell (-8.17% to 9.44 dollars) after a lowering of the recommendation from UBS analysts.