Canada’s commodity-linked main stock index ended lower on Friday as the U.S. dollar strengthened but the index still notched its sixth straight weekly gain. The S&P 500 ended little changed in a week in which it registered its biggest weekly percentage gain of 2024 amid signs Federal Reserve interest rate cuts are nearing.
The S&P/TSX composite index ended down 103.18 points, or 0.5%, at 21,984.08, after posting on Tuesday its first record high closing level in two years.
For the week, the index was up 0.6%. The weekly winning streak was the longest since December 2020.
“Today is a bit of a day off (due to) the strong dollar. Investors are taking some profit off the table in many areas,” said Allan Small, senior investment advisor of the Allan Small Financial Group with iA Private Wealth.
“Whenever you have U.S. dollar strength, it’s not good for commodities. We know our markets are very heavily weighted in that space.”
Resource shares account for roughly 30% of the Toronto market. The materials sector, which includes precious and base metals miners and fertilizer companies, fell 1% as gold and copper prices fell.
The U.S. dollar notched a second straight week of gains against a basket of major currencies, making commodities priced in the U.S. currency more expensive for buyers using other currencies.
Heavily-weighted financials also lost ground, falling 0.6%, and technology was down 1.1%.
Tilray Brands Inc shares climbed 19.8%, with shares of pot firms jumping as Germany makes cannabis possession legal.
On Wall Street, the Nasdaq ended slightly higher for the day, along with an index of semiconductors. The semiconductor index was also up sharply for the week amid continued optimism over artificial intelligence. The Dow ended lower on the day.
On Friday, consumer discretionary shares edged lower.
Shares of Nike fell 6.9%, a day after the world’s largest sportswear maker warned that revenue in the first half of fiscal 2025 would shrink by a low-single-digit percentage.
Lululemon Athletica shares fell 15.8% after the company forecast annual revenue and profit below expectations.
Earlier in the week, the Fed left rates unchanged but signaled it was still on track for three rate cuts this year.
“The market took that as saying the Fed isn’t your enemy any more, and eventually it is going to be your friend,” said Matt Stucky, chief equity portfolio manager at Northwestern Mutual Wealth Management Company.
Traders now see about a 71% chance of the first rate cut hitting in June versus 56% at the start of this week, according to the CME’s FedWatch Tool.
The Dow Jones Industrial Average fell 305.47 points, or 0.77%, to 39,475.90, the S&P 500 lost 7.35 points, or 0.14%, to 5,234.18 and the Nasdaq Composite gained 26.98 points, or 0.16%, to 16,428.82.
For the week, the S&P 500 gained 2.3% in its biggest weekly percentage advance since mid-December. The Dow climbed 2%, also its biggest weekly gain since mid-December, while the Nasdaq rose 2.9%, its biggest weekly percentage jump since mid-January.
“At some point before too long it wouldn’t be surprising to see a pullback or correction, or even a sideways trading period, after the gains we’ve had since the October lows,” said Michael Sheldon, director at RDM Financial Group at Hightower in Westport, Connecticut.
Among the day’s gainers, FedEx jumped 7.4%, a day after the company beat Wall Street expectations for quarterly profit.
On the flip side, Digital World Acquisition fell 13.7% after shareholders of the blank-check firm voted to approve its merger with former U.S. President Donald Trump’s media and technology company.
Volume on U.S. exchanges was 9.45 billion shares, compared with the 12.34 billion average for the full session over the last 20 trading days.
Reuters, Globe staff