Canada’s main stock index fell on Tuesday to a near one-week low as signs of faltering global economic growth pressured commodity-linked stocks. Equities on Wall Street, however, ended a shade higher.
The S&P/TSX composite index ended down 138.51 points, or 0.63%, at 21,978.18, its lowest closing level since last Wednesday.
U.S. job openings fell in April to the lowest in more than three years in a sign that labour market conditions are softening. It follows data on Monday that showed a slowdown in U.S. manufacturing activity for a second straight month in May. Treasury yields on Tuesday continued to ease in both the U.S. and Canada.
The materials sector in Toronto fell nearly 4% as gold and copper prices declined.
“Any hint of weakness in the U.S. or the global economy doesn’t bode well for commodity prices,” said Elvis Picardo, a portfolio manager at Luft Financial, iA Private Wealth, adding that after recent gains for resource shares the decline in commodity prices has been “used as an excuse to take some profits off the table.”
Energy also lost ground, falling 2.06% in Toronto, as U.S. West Texas Intermediate crude futures finished down 97 cents, or 1.31%, at US$73.25.
Helping to limit the TSX’s decline was a gain for the defensively-orientated consumer staples sector. It rose 0.77%, while the utilities group, which includes high-dividend paying stocks that could particularly benefit from rate cuts, added 0.23%.
Investors were awaiting the Bank of Canada’s decision on interest rates on Wednesday. Money markets are pricing in just over an 80% chance that it will cut rates for the first time since March 2020.
In U.S. markets, indexes gained ground after paring earlier loses. Equities in real estate and consumer staples sectors advanced ahead of others, while materials and energy stocks were the biggest losers.
Market expectations for a September rate reduction by the U.S. Federal Reserve now stand at around 65%, versus below 50% last week, according to the CME’s FedWatch tool. The closely watched non-farm payrolls data for May is due on Friday.
The Dow Jones Industrial Average rose 140.26 points, or 0.36%, to 38,711.29, the S&P 500 gained 7.94 points, or 0.15%, to 5,291.34 and the Nasdaq Composite gained 28.38 points, or 0.17%, to 16,857.05.
Megacap technology stocks, including Amazon.com, Alphabet, Nvidia and Microsoft, ended higher after losing ground early in the session.
Oil giants Exxon Mobil and Chevron fell 1.6% and 0.8%, respectively, as demand concerns weighed on crude prices.
Bath & Body Works slumped 12.8% after a lower revision to its quarterly profit forecast. Axos Financial dropped after Hindenburg Research disclosed a short position in the lender.
Paramount Global fell 4.4% after the media conglomerate said it was exploring strategic options or a joint venture for its Paramount+ streaming service.
Declining issues outnumbered advancers by a 1.32-to-1 ratio on the NYSE. On the Nasdaq, 1,468 stocks rose and 2,762 fell as declining issues outnumbered advancers by a 1.88-to-1 ratio. The S&P 500 posted 19 new 52-week highs and 6 new lows while the Nasdaq Composite recorded 40 new highs and 134 new lows. Total volume of shares traded across U.S. exchanges was about 10.6 billion, compared with the 12.6 billion average over the last 20 trading days.
Reuters, Globe staff
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.