Canada’s primary stock index dropped by more than 100 points on Tuesday due to declines in financial, industrial, and telecom sectors. stocks Strength in energy and base metals was offset by weakness in other areas, while the U.S. stock markets remained. also fell.
The S&P/TSX composite index finished 110.15 points lower at 22,075.10.
In New York, the Dow Jones industrial average decreased by 396.61 points to 39,170.24. The S&P 500 index went down by 37.96 points to 5,205.81, and the Nasdaq composite dropped by 156.38 points to 16,240.45.
According to Angelo Kourkafas, senior investment strategist at Edward Jones, stocks saw a second consecutive day of decline at the beginning of the new quarter.
It marked the most negative day for U.S. stocks in four weeks, with both the Dow and the Nasdaq losing one percent.
The decrease was driven by concerns that the positive economic news in the U.S. might lead the Federal Reserve to delay interest rate cuts, he explained.
After reducing expectations for cuts from six to three in 2024 at the start of the year, the markets are now considering the possibility of only two cuts this year, said Kourkafas, and they could start later than expected.
Kourkafas mentioned that “The threshold for rate hikes is very, very high.”
However, he added that the markets were also due for a pause after a long and remarkable period of growth.
He stated, “In our opinion, the foundational situation is still favorable.”
Recently, U.S. markets have achieved numerous record highs, while the Canadian index has also set a few records of its own.
Last week, Fed chair Jerome Powell reiterated that the central bank needs to see more progress on inflation before considering interest rate cuts.
In Canada, although the economy has not been as resilient, expectations for cuts are still being postponed to some extent, said Kourkafas. The predictions are still around three cuts in 2024, but the first one might occur in July instead of June.
This week, the focus is on new employment data in the U.S. and Canada, he noted.
Kourkafas pointed out that the price of oil continued to rise, surpassing US$85 per barrel for the first time since October. He attributed this mainly to escalating tensions in the Middle East and ongoing OPEC production cuts.
The Canadian dollar was trading at 73.68 cents US compared to 73.67 cents US on Monday.
The May crude oil contract increased by US$1.44 to US$85.15 per barrel, and the May natural gas contract rose by three cents to US$1.86 per mmBTU.
The June gold contract went up by US$24.70 to US$2,281.80 per ounce, and the May copper contract increased by two cents to US$4.07 per pound.
— With files from The Associated Press
