Stocks fall on Fed worries, European gas woes: markets fold

(Bloomberg) — Stocks fell, with major indexes heading for a third weekly decline, after jobs data did little to change views on the Federal Reserve’s next policy move. A delay in opening a key natural gas pipeline to Europe also weighed on sentiment ahead of a three-day weekend for US markets.

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The S&P 500 was down in the afternoon. It had risen as much as 1.3% after employers added 315,000 jobs last month, slightly more than economists had expected. The two-year yield fell below 3.5 percent as the jobs report showed wage growth slowed, possibly signaling some slack in labor demand.

The labor market data adds to a series of reports this week that back up the Fed’s contention that the economy is strong enough to withstand more tightening. Risky assets have been under pressure since Fed Chairman Jerome Powell made it clear the central bank will raise interest rates further and keep them high until price gains slow. Markets are still pricing in the possibility of a three-quarters of a percentage point rise in interest rates this month.

“Market sentiment took a bearish turn in early afternoon trading, with stocks weakening after all payroll gains after non-farm activity as participants responded to headlines pointing to a prolonged shutdown of the Nord Stream pipeline,” said Eric Theoret, global macro strategist at Manulife Investment. Management.

Read more: Everything is working ‘as it should’: Wall Street reacts to jobs

Oil pared gains after news that the Group of Seven industrialized nations agreed to introduce a price ceiling for global Russian oil markets. In a huge blow to Europe, Russia’s Gazprom PJSC said its main natural gas pipeline to Europe cannot be reopened as planned on Saturday as a new technical issue was discovered.

Concern that rising interest rates will hurt growth has already weighed on markets, pushing global bonds into their first bear market in a generation. The Bloomberg Global Total Return Index of government and investment corporate bonds is down more than 20% from its 2021 peak.

Meanwhile, zinc is headed for its biggest weekly loss in more than a decade on concerns that Chinese demand will be curbed by new virus restrictions. Gold and Bitcoin rose.

Read more: US employment finally surpasses pre-pandemic level

Some of the main movements in the markets:

inventories

  • The S&P 500 was down 0.3% at 1:17 p.m. New York time

  • The Nasdaq 100 fell 0.7%

  • The Dow Jones industrial average fell 0.3%

  • The MSCI World Index fell 0.8%

currency

  • The Bloomberg Dollar Spot index fell 0.1%

  • The euro rose 0.2% to $0.9965

  • The British pound fell 0.2% to $1.1519

  • The Japanese yen was slightly lower at 140.11 per dollar

Bindings

  • The 10-year bond yield fell six basis points to 3.20%

  • Germany’s 10-year yield fell four basis points to 1.53%

  • Britain’s 10-year yield rose four basis points to 2.92%

Goods

  • West Texas Intermediate crude oil rose 0.9% to $87.38 a barrel

  • Gold futures rose 0.9% to $1,724.40 an ounce

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