Canada’s main stock index fell to a near two-week low on Wednesday as the price of oil moved back toward its level before the start of the Iran war, with energy and metal mining shares leading the market lower.
The S&P/TSX Composite Index ended down 191.29 points, or 0.55%, at 34,736.09, marking its lowest closing level since June 11. The Nasdaq and S&P 500 also ended lower as concerns about high-flying tech stock valuations persisted.
West Texas Intermediate crude settled 3.9% lower at US$70.34 a barrel as more stranded oil tankers exited the Strait of Hormuz, easing supply concerns. Brent crude touched a low of US$73.12, its weakest since Feb. 27, the day before U.S.-Israeli strikes on Iran.
“As some of these supply constraints continue to ease we’re seeing the (commodity) prices start to come back off to where they were before the war,” said Colin Cieszynski, chief market strategist at SIA Wealth Management. “It’s not just that they’re coming off, they’re coming off quite significantly.”
The TSX energy sector was down 3.2%, while the materials group, which includes metal-mining stocks, ended 3.7% lower.
The price of gold fell 2.6% and copper was down 3.4% as rising expectations of Federal Reserve interest rate hikes boosted the U.S. dollar. Shares of NovaGold Resources tumbled 14.4% as the company reported a wider second-quarter net loss.
Still, the TSX’s technology sector was up 3.3% as shares of e-commerce company Shopify gained 6.1%. Consumer staples was another standout, adding 2.4%. Seven of the TSX’s 10 major sectors notched gains.
On Wall Street, the S&P 500 passenger airlines index gained 5.2% in response to the lower oil prices. Tech stocks slipped, intensifying the focus on chipmaker Micron Technology’s earnings that landed after the bell. The stock has surged more than 200% in 2026 but closed on Wednesday down 0.3%. It jumped in extended trading after quarterly revenue and fourth quarter forecasts beat Wall Street estimates.
Cerebras Systems tumbled 19.6% after the chip designer forecast full-year profit margins would drop below first-quarter figures in its debut report after going public. Also weighing on the stock, OpenAI announced its own in-house inference chip called Jalapeño.
Concerns around debt-backed spending by hyperscalers and mounting fears of a more hawkish Federal Reserve have fueled the market downturn this week that has erased more than $1 trillion in market value from the Nasdaq 100.
“The Middle East conversation is wrapping up ... energy prices are coming off,” said Michael Monaghan, partner and portfolio manager at Founder ETFs. “But you continue to have the AI CapEx buildout where, for some reason, people like the recipients of the spend and have been punishing those doing the spending.”
Six of the 11 major S&P 500 sectors moved higher, with the industrials sector rising the most at 1.2%. Consumer discretionary stocks also rose 0.8%, helping to offset the biggest losses in tech and energy stocks.
The Dow Jones Industrial Average rose 182.06 points, or 0.35%, to 51,848.90, the S&P 500 lost 7.24 points, or 0.10%, to 7,358.22 and the Nasdaq Composite lost 110.40 points, or 0.43%, to 25,476.64.
Homebuilders soared after Trump canceled a planned signing of bipartisan legislation aimed at speeding up availability of affordable housing. Hovnanian Enterprises jumped 11.3%. PulteGroup surged 7.2% and Toll Brothers rose 6.7%.
Among other movers, Hertz sank 40.7% after the car-rental firm said it expects second-quarter adjusted core earnings near the lower end of its forecast range and announced a proposed offering of US$100 million of common stock.
Traders are adding to bets of a second rate hike from the Fed by the end of December, according to CME Group’s FedWatch tool. Previously, the market expected a single 25-basis-point rise.
The closely watched Personal Consumption Expenditures Price Index, the Fed’s preferred inflation gauge, could offer insight on the monetary policy path on Thursday.
Declining issues outnumbered advancers by a 1.03-to-1 ratio on the NYSE, which had 205 new highs and 226 new lows. On the Nasdaq, 2,323 stocks rose and 2,499 fell as declining issues outnumbered advancers by a 1.08-to-1 ratio. The S&P 500 posted 25 new 52-week highs and four new lows while the Nasdaq Composite recorded 206 new highs and 177 new lows. Volume on U.S. exchanges was 25.84 billion shares, compared with the 22.92 billion average for the full session over the last 20 trading days.
Reuters, Globe staff