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Wall Street ended lower on Wednesday, spooked by worries that the Delta coronavirus variant could blunt the economy’s recovery and on uncertainty about when the Federal Reserve may pull back its accommodative policies. The Canadian market followed in its path, with mixed performance in commodities and a no-surprise decision on monetary policy by the country’s central bank providing little reason for investors to diverge from the U.S. playbook.

The S&P/TSX Composite Index closed at 20,741.79, down 64.84 points or 0.31%. Sector performance was mixed, but the heavyweight financials, energy and materials sectors were all lower. The Canadian tech sector was particularly weak, sliding 1.29%.

The Bank of Canada Wednesday kept its benchmark interest rate at 0.25%, where it has been since early in the pandemic, and maintained its current pace of government bond buying at $2-billion a week.

Oil prices settled up more than 1% as U.S. Gulf of Mexico producers made slow progress in restoring output after Hurricane Ida. West Texas Intermediate (WTI) crude settled up 95 cents, or 1.4%, to $69.30 a barrel.

Producers in the Gulf are still struggling to restart operations nine days after Ida swept through the region with powerful winds and drenching rain. About 77% of U.S. Gulf production remained offline on Tuesday, or about 1.4 million barrels per day (bpd). About 17.5 million barrels of oil have been lost to the market so far.

Gold slipped to a two-week low as strength in the U.S. dollar and higher U.S. Treasury yields outweighed the boost to bullion from deepening concerns about global economic growth. U.S. gold futures settled down 0.3% at $1,793.5.

On Wall Street, Apple and Facebook both fell after helping push the Nasdaq to record highs in the previous session. The dips in those two Silicon Valley giants contributed more than any other companies to the S&P 500′s decline for the session.

Investors have become more cautious following Friday’s weak August payrolls data, while pressures from rising costs, despite the economy slowing, have increased concerns that the Fed could move sooner than expected to scale back massive monetary measures enacted last year to shield the economy from the coronavirus pandemic.

The U.S. economy “downshifted slightly” in August as concerns grew over how the renewed surge of coronavirus cases would affect the economic recovery, the Fed said on Wednesday in its latest Beige Book compendium of anecdotal reports about the economy.

The S&P 500 has dipped less than 1% from its record closing high last Thursday, and it remains up 20% year to date, buoyed by the Fed’s accommodative monetary policy.

“Investors are pulling petals from a daisy, saying, ‘The economy will grow, the economy won’t grow,’” said Sam Stovall, chief investment strategist at CFRA. “They can’t make up their minds, so they have no commitment to long-term positions.”

St. Louis Federal Reserve Bank President James Bullard told the Financial Times that the Fed should move forward with a plan to trim its pandemic stimulus program despite a slowdown in job growth.

Most of the 11 S&P 500 sector indexes fell, with materials, energy and technology among the deepest declines.

Unofficially, the Dow Jones Industrial Average fell 0.2% to end at 35,029.19 points, while the S&P 500 lost 0.13% to 4,514.

The Nasdaq Composite dropped 0.57% to 15,286.68.

Reuters, with files from Darcy Keith of The Globe and Mail

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