Canada’s main stock index was dragged down on Wednesday by a drop in rate-sensitive technology stocks, as shares of the country’s third biggest company, Shopify , hit a six-week low and those of crypto miners fell.
The Toronto Stock Exchange’s S&P/TSX composite index was down 45.15 points, or 0.2 per cent, at 21,172.38.
Technology stocks led losses on the index with a 2.4 per cent decline, dragged by crypto miners Hut 8 and Bitfarms, down 3.9 per cent and 7.0 per cent, respectively, after Bitcoin lost 2 per cent. Shopify shares were down nearly 4 per cent at C$102.
The materials sector, which includes Canadian miners, extended declines to a third consecutive session after it fell 0.9 per cent. Gold miner Wheaton Precious Metals lost the most among materials stocks, falling 8 per cent after brokerages cut price targets on the stock due to underwhelming 2024 production forecast.
Insurance company iA Financial Corp plummeted 8.6 per cent to the bottom of the index after it reported its fourth-quarter profit below analysts’ estimates. The stock pulled heavyweight financials down 0.6 per cent.
Canada’s main stock index is set to notch a record high in 2025 as the expected start of interest rate cuts by central banks bolsters the high-dividend paying stocks that make up much of the market, a Reuters poll found.
Among other stocks, shares of apparel-maker Gildan Activewear climbed 3.7 per cent after its fourth-quarter results beat analysts’ estimates.
The S&P 500 and Dow Jones industrials eked out small gains on Wednesday, while the Nasdaq closed lower for a third straight session as investors awaited the release of Nvidia’s earnings that could determine near-term momentum for equities.
After the closing bell, Nvidia shares surged 6 per cent after it forecast fiscal first-quarter revenue above estimates on robust demand for its chips that dominate the market for artificial intelligence (AI).
During the session, Nvidia shares fell 2.85 per cent, adding to the previous day’s decline of more than 4 per cent for the chip designer.
Nvidia shares have soared nearly 40 per cent this year, making it the biggest gainer on the S&P 500 after a leap of almost 240 per cent in 2023. Analysts had cautioned that its lofty valuation could make the stock vulnerable to a sharp pullback if the company delivered anything short of a blowout report.
“It’s been driven by excitement and enthusiasm around AI and of course the AI darling in the room is Nvidia,” said Jason Ware, chief investment officer at Albion Financial Group in Salt Lake City, Utah.
“Markets are looking at Nvidia with a little bit of anxiety, maybe ... we need to see a good report from the leader in the space and that leader is Nvidia.”
The S&P 500 climbed 0.13 per cent to end the session at 4,981.80 points. The Nasdaq declined 0.32 per cent to 15,580.87 points, while the Dow Jones Industrial Average rose 0.13 per cent to 38,612.24 points.
Minutes from the Federal Reserve’s January meeting showed most policymakers were concerned about risks of cutting interest rates too soon, with broad uncertainty about how long borrowing costs should remain at their current level.
After the release of the minutes, traders of U.S. short-term interest-rate futures
stuck to bets
the Fed will begin cutting interest rates no earlier than June.
Despite the modest advance, nearly all of the 11 major S&P sectors advanced, with only the heavily weighted technology index lower with a decline of 0.76 per cent. Energy shares led gainers with a rise of 1.86 per cent.
Wall Street’s 2024 rally ran into turbulence last week after data hinted at sticky inflation, raising concerns the Fed would be in no hurry to cut interest rates.
The January inflation data complicates upcoming rate decisions, Richmond Fed president Thomas Barkin said.
Palo Alto Networks plunged 28.44 per cent after the cybersecurity firm forecast third-quarter billings below analyst estimates.
Shares of other cybersecurity companies such as Fortinet , Zscaler and Crowdstrike Holdings were also weaker.
Amazon.com edged up, with the company set to join the Dow Jones Industrial Average effective next week, replacing Walgreens Boots Alliance, which saw its shares decline.
Advancing issues were roughly even with decliners by on the NYSE. Declining issues outnumbered advancers for a 1.73-to-1 ratio on the Nasdaq.
The S&P 500 posted 25 new highs and no new lows; the Nasdaq recorded 47 new highs and 96 new lows.
Volume on U.S. exchanges was relatively light, with 10.5 billion shares traded, compared to an average of 11.7 billion shares over the previous 20 sessions.
Reuters