Canada’s main stock index fell on Wednesday led by declines in energy stocks which fell in tandem with oil prices and ahead of a Bank of Canada interest rate decision at 10:00 a.m. ET.
The Toronto Stock Exchange’s S&P/TSX composite index was down 24.52 points, or 0.15 per cent, at 16,136.78.
Oil fell towards $77 a barrel on Wednesday as a tropical storm hitting the U.S. Gulf coast weakened and moved away from oil-producing areas, easing supply concerns.
Crude had jumped the previous day as oil companies shut dozens of offshore platforms in anticipation of damage from tropical storm Gordon. But by Wednesday the storm was weakening, reducing its threat to oil producers.
“Tropical storm Gordon made an uneventful landfall after dashing expectations that it would strengthen to a hurricane,” said Stephen Brennock of oil broker PVM.
“Instead, it weakened considerably and deviated away from oil-producing areas, which, as a result, has taken the wind out of bulls’ sails.”
Brent crude, the global benchmark, fell 78 cents to $77.39 a barrel. On Tuesday prices had climbed to $79.72, their highest since May.
U.S. crude was down 88 cents at $68.99.
U.S. stocks opened lower on Wednesday as investors considered the likelihood of President Donald Trump going through with plans to impose a fresh round of tariffs on Chinese goods right after consultations end on Thursday.
Focus also remained on social media stocks as top Facebook and Twitter executives testify in front of the U.S. Congress.
The Dow Jones Industrial Average fell 32.64 points, or 0.13 per cent, at the open to 25,919.84.
The S&P 500 opened lower by 5.13 points, or 0.18 per cent, at 2,891.59. The Nasdaq Composite dropped 17.71 points, or 0.22 per cent, to 8,073.53 at the opening bell.
Shares of Facebook were down 0.6 per cent in early trading, while Twitter dropped 2.2 per cent as their top executives face the U.S. Congress over what lawmakers see as a failure to combat continuing foreign efforts to influence U.S. politics.
Snapchat-parent Snap Inc was off 1.8 per cent ahead of a testimony by Facebook Chief Operating Officer Sheryl Sandberg and Twitter Chief Executive Officer Jack Dorsey from 9:30 a.m. ET.
“We are definitely going to see a negative tilt today with the big social media leaders appearing in front of Congress,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Fla.
“There may be a little bit of nervousness around this, although nothing contributing to a major market move.”
U.S. trade deficit rose to a five-month high in July as exports of soybeans and civilian aircraft declined and imports hit a record high, data from the Commerce Department showed, suggesting that trade could be a drag on economic growth in the third quarter.
The trade data comes as consultations on a U.S. proposal to impose tariffs on $200 billion more in Chinese imports ends on Sept. 6, with Trump ready to impose these tariffs as soon as the comment period ends, according to Bloomberg.
The United States and Canada will also resume talks to settle differences on revamping the North American Free Trade Agreement (NAFTA), despite Trump’s threats to continue trade deals with just Mexico in a bilateral agreement.
“There’s still a cloud hanging over the market about whether we are actually going to see these tariffs take effect by the end of this week and continued concerns about the NAFTA deal,” Brown added.
Reuters