TORONTO — Canada's main stock index fell almost 100 points Wednesday, tipping into the red after a strong start to the day, while U.S. markets also reversed earlier gains to end the day down.
The S&P/TSX composite index closed down 98.41 points at 21,880.95.
In New York, the Dow Jones industrial average was down 234.21 points at 38,763.45. The S&P 500 index was down 40.53 points at 5,199.50, while the Nasdaq composite was down 171.05 points at 16,195.81.
Investors are still digesting the dramatic Monday that started the week on Wall St., said Ryan Crowther, portfolio manager with Franklin Templeton Canada.
Monday saw a significant sell-off in the U.S. triggered by concerns over the latest jobs numbers as well as economic conditions in Japan.
“Monday is still ... the topic and the backdrop of the week, even for Canadian investors,” said Crowther.
Though Wednesday started on strong footing, the momentum didn’t stick, said Crowther.
“I think as far as market sentiment goes, it makes sense that investors are having a tough time shaking off the Monday session,” he said, due to “elevated anxiety” over economic conditions.
Shares in Nvidia, one of the biggest and most influential companies on Wall St. went from a morning gain of more than four per cent to a loss of more than five per cent.
Investors are weighing valuations for the large companies that have driven market gains so far this year, said Crowther.
“It's still a question as to if investors were overpaying for some of that growth, then to what extent were they overpaying? And is the sell-off that we've seen enough to now properly discount a growth story like Nvidia?” he said.
In Canada, earnings from Shopify helped buoy the market. The company’s shares rose almost 18 per cent after it reported higher sales and said it’s weathering softening consumer spending well.
The Bank of Canada Wednesday released a summary of its deliberations ahead of its decision in July to cut interest rates a second time. The summary showed some members of the central bank’s governing council are concerned that weak job market conditions could hinder economic growth.
But the focus for investors is really on the U.S. economy and concerns the U.S. Federal Reserve has waited too long to move rates lower, said Crowther.
The Canadian dollar traded for 72.79 cents US compared with 72.50 cents US on Tuesday.
The September crude oil contract was up US$2.03 at US$75.23 per barrel and the September natural gas contract was up 10 cents at US$2.11 per mmBTU.
The December gold contract was up 80 cents US at US$2,432.40 an ounce and the September copper contract was down eight cents at US$3.95 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Aug. 7, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Rosa Saba, The Canadian Press
