S&P 500 in U-Turn as European Energy Crisis Fears Mount on Gazprom Delay

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S&P 500 in U-Turn as European Energy Crisis Fears Mount on Gazprom Delay
Credit: © Reuters.

By Yasin Ebrahim

Investing.com -- The S&P 500 gave up gains Friday, as rising worries about a brewing energy crisis in Europe denting global growth offset data pointing to a stronger-than-expected U.S. labor market.

The S&P 500 fell 0.9%, the Dow Jones Industrial Average slipped 0.78%, or 245 points, the Nasdaq was down 1.3%.

Russia's state-controlled energy firm Gazprom said it won’t be able to resume gas flows through the Nord Stream pipeline, a main supply route to Europe, by a Saturday deadline, citing a fault during maintenance. The energy firm didn't provide details on a new timeline, stoking further worries about an energy crisis in Europe, adding to fears of a deep recession on the continent that could derail global growth.

U.S. stocks gave up their early-day gains, which followed data showing that the U.S. economy created more jobs than expected and wage pressures slowed as more people entered the labor market.

August payrolls were 315,000, ahead of expectations for 300,000, while the participation rate “jumped 0.3% to 62.4%, the highest level since March, matching the COVID-era high,” Jefferies said. 

Treasury yields eased from the session highs, but did little to boost growth areas of the market such as tech.

Meta Platforms (NASDAQ: META ) slipped 3% to lead big tech lower, with Apple (NASDAQ: AAPL ), Microsoft (NASDAQ: MSFT ) and Alphabet (NASDAQ: GOOGL ) down more than 1%.

Chip stocks also slid into the red, though losses were kept in check by a climb in Broadcom (NASDAQ: AVGO ).

The chipmaker delivered upbeat guidance after reporting quarterly results that topped Wall Street estimates on both the top and bottom lines, led by strength in its semiconductor business.

Sentiment on chipmakers have been soured by deteriorating global growth that is expected to hit demand, but Broadcom could weather the storm “better than most due to a consistent scrubbing of backlog…long lead-times on non-cancellable orders, and heavy infrastructure exposure,” Deutsch Bank said in a note.

Lululemon Athletica (NASDAQ: LULU ), meanwhile, jumped more than 7% and delivered an upbeat outlook, forecasting strong sales to continue even as inflation continues to put the squeeze on consumers. The athletic leisure wear company also reported quarterly results that topped analysts’ estimates .

In other news, Beyond Meat (NASDAQ: BYND ) fell 4% after Baillie Gifford cut its stake in the plant-based food producer to a 6.61% stake from a 13.38% stake previously reported last year.

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