Canada’s main stock index fell on Wednesday, pressured by a sell-off in energy and materials shares tracking lower commodity prices, while investors awaited minutes from the Federal Reserve’s latest policy meeting to gauge the outlook on global interest rates.
At 10:10 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 91.57 points, or 0.41%, at 22,376.59. The index looks set for its biggest percentage drop in three weeks if losses persist.
The materials sector led the sectoral declines, falling 1.9% as prices of most base and precious metals eased.
Copper prices were hurt as profit-taking kicked in after the red metal hit record high levels on Monday, while gold edged lower as investors braced for minutes from the Fed’s April 30- May 1 policy meeting, due at 1400 ET.
The energy sector followed with a 1.5% drop as crude prices fell on expectations of higher-for-longer U.S. interest rates, potentially impacting fuel use in the world’s largest consumer.
“If crude continues to stay within its current range, then the odds favor a rally back towards resistance levels once again,” said David Morrison, senior market analyst at Trade Nation.
Investors also looked ahead to the long-awaited earnings report and commentary from AI bellwether Nvidia after markets close.
Among individual stocks, copper miner Hudbay Minerals dropped 6.8% on plans to raise $300.2 million in an equity offering to help fund near-term growth initiatives at its Copper Mountain unit, among other purposes.
Shopify added 4.4% after Goldman Sachs upgraded the e-commerce company’s stock to ‘buy’, as per thefly.com, which pushed the information technology sector higher by 1.4%.
Meanwhile, some economists said the Bank of Canada may dash hopes of a June interest rate cut and instead move in July, giving it seven more weeks of key data to confirm the recent trend of a slowing economy and continued easing of inflation.
Wednesday’s analyst upgrades and downgrades
Commodities
Oil prices fell for a third straight session on concerns that higher-for-longer interest rates in the United States may impact fuel use in the world’s largest oil consumer.
Brent crude futures fell 1.1 per cent to US$81.94 a barrel, while U.S. West Texas Intermediate crude (WTI) futures dropped 1 per cent to US$77.89.
In other commodities, gold prices inched lower but hovered above the key US$2,400 level. Spot gold was 0.3 per cent lower at US$2,415.33 an ounce after bullion hit a record high of US$2,449.89 on Monday.
Currencies and bonds
The Canadian dollar weakened against the greenback, trading 0.15 per cent lower.
The day range on the loonie was 73.18 US cents to 73.45 US cents. The Canadian dollar was up about 0.29 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, advanced 0.05 per cent to 104.70, reaching above a five-week low of 104.07 touched last week.
The euro was trading steady at US$1.085 while the British pound climbed 0.3 per cent to US$1.2729, near two-month highs.
In bonds, the yield on the U.S. 10-year note was was slightly higher at 4.442 per cent ahead of the North American opening bell.
Other corporate news
TJX Cos. has raised its annual profit forecast, banking on easing costs and robust demand. It expects annual earnings per share to be in the range of $4.03 to $4.09, compared with its prior forecast of $3.94 to $4.02.
Economic news
(10 a.m. ET) U.S. existing home sales for April. Consensus is a decline of 1.1 per cent on an annualized rate basis.
(2 p.m. ET) U.S. Fed minutes from April 30-May 1 meeting are released.
North American markets open at 9:30 a.m. ET.
With Reuters and The Canadian Press