TORONTO — Losses in the energy sector weighed on Canada's main stock index as the price of oil fell Tuesday, though the index posted just a small decline while U.S. markets were mixed.
The S&P/TSX composite index was down 24.06 points at 23,003.09.
In New York, the Dow Jones industrial average was down 92.63 points at 40,736.96. The S&P 500 index was up 24.47 points at 5,495.52, while the Nasdaq composite was up 141.28 points at 17,025.88.
“I think a lot of investors are adopting a little bit more of a cautious tone,” said Brianne Gardner, senior wealth manager of Velocity Investment Partners at Raymond James Ltd.
The caution comes ahead of Wednesday’s update on U.S. consumer inflation as well as the looming decision next week from the U.S. Federal Reserve, which is widely expected to start cutting its key interest rate.
Inflation concerns have receded while the risks of higher interest rates for the labour market are heightened, said Gardner, with the last two U.S. jobs reports coming in weaker than expected and stoking market fears.
“But that doesn't mean that inflation numbers still aren't important,” she said, including the U.S. producer price index that comes on Thursday.
“The really major catalyst that everyone has their eye on is the Fed decision next Wednesday,” said Gardner.
Gardner said uncertainty is building into the fall, with high-flying tech stocks under more pressure while investors are taking profits and rotating some of their holdings into more defensive areas of the market.
The U.S. election is likely to add to that volatility, said Gardner. The presidential debate between Vice President Kamala Harris and former President Donald Trump is set for Tuesday evening.
Banks weighed on U.S. markets Tuesday after comments from some executives at an industry conference indicating potentially weaker earnings to come.
Meanwhile, oil prices continued their descent after OPEC cut its forecast for global demand in 2024.
Prices are below US$70 per barrel for the first time since December 2021, noted Gardner.
“Markets are kind of fretting about a series of potential headwinds for the sector, including slowing economic growth, lower rates and weak demand from China,” said Gardner.
“So those could continue to put short-term pressure on the oil market.”
On the TSX, the energy index was down 2.4 per cent.
Bank of Canada governor Tiff Macklem spoke in London on Tuesday, warning that upward pressure on inflation could be on the horizon due to slowing globalization and trade disruption.
The Canadian dollar traded for 73.53 cents US compared with 73.74 cents US on Tuesday.
The October crude oil contract was down US$2.96 at US$65.75 per barrel and the October natural gas contract was up six cents at US$2.23 per mmBTU.
The December gold contract was up US$10.40 at US$2,543.10 an ounce and the December copper contract was down four cents at US$4.10 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Sept. 10, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Rosa Saba, The Canadian Press
