TORONTO 鈥� Losses in the base metals sector led Canada's main stock index lower on Thursday, while U.S. stock markets also fell.
The S&P/TSX composite index closed down 124.41 points at 22,726.76.
In New York, the Dow Jones industrial average was down 533.06 points at 40,665.02. The S&P 500 index was down 43.68 points at 5,544.59, while the Nasdaq composite was down 125.70 points at 17,871.22.
Uncertainty over the looming U.S. election is weighing on investors, said Philip Petursson, chief investment strategist at IG Wealth Management.
鈥淚 think the election is casting some uncertainty. The fundamentals are not heading in the right direction. And the market is kind of digesting all of that at once,鈥� he said.
That election uneasiness is particularly affecting the tech sector, added Petursson, especially big tech companies and those involved in semiconductor chips.
鈥淭here's comments from both sides on the potential breakup of big tech companies like Google, for example,鈥� he said.
Big tech stocks led the market lower in the U.S. on Thursday, with Apple down two per cent, Amazon down 2.2 per cent and Microsoft down 0.7 per cent.
However, there鈥檚 definitely space for a correction in tech, which has led record-breaking gains on Wall St. for months on end, said Petursson.
鈥淚t鈥檚 been very, very hot,鈥� he said.
He said any stock related to artificial intelligence has been 鈥渙n a tear鈥� this year, in contrast to the overall U.S. economy, which has been showing signs of weakness over the past few months as higher interest rates take their toll.
鈥淭here's a difference between the AI economy and the real economy,鈥� he said.
Meanwhile in Canada, investors are awaiting the upcoming interest rate decision by the Bank of Canada, which is expected to announce a second cut.
As the Bank of Canada continues cutting its benchmark interest rate, Petursson said he expects the central bank to shift its focus away from inflation and toward the broader economy, in particular unemployment.
鈥淚t would be a greater risk if the Bank of Canada continued to focus on inflation and not focusing on unemployment, and then just ignoring the potential weakness that that can create.鈥�
The U.S. Federal Reserve, meanwhile, appears to be in limbo when it comes to potential cuts, said Petursson.
The Canadian dollar traded for 73.01 cents US compared with 73.07 cents US on Wednesday.
The September crude oil contract was down 14 cents at US$81.30 per barrel and the August natural gas contract was up nine cents at US$2.13 per mmBTU.
The August gold contract was down US$3.50 at US$2,456.40 an ounce and the September copper contract was down 13 cents at US$4.28 a pound.
This report by The Canadian Press was first published July 18, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Rosa Saba, The Canadian Press
