A trader works on the floor of the New York Stock Exchange (NYSE) at the opening bell, in the Financial District of New York City on March 17.ANGELA WEISS/AFP/Getty Images
Canada’s main stock index fell on Tuesday as domestic data showed inflation heating up and investors awaited an interest rate decision by the U.S. Federal Reserve.
The S&P/TSX composite index ended down 79.04 points, or 0.3%, at 24,706.07, after two straight days of gains.
Canada’s annual inflation rate rose to 2.6% in February - the first time in seven months that inflation has crossed above the Bank of Canada’s 2% target. Money markets slightly raised their bets after the data that the central bank will refrain from cutting its key interest rate further at its next policy meeting on April 16. But they are still pricing in nearly two more quarter point cuts by the end of this year.
U.S. stocks also fell. The Fed is expected to keep interest rates unchanged on Wednesday when it will present updated economic projections. Investors worry that the economy could suffer in a fast-moving trade war.
Several U.S. central bank officials have cautioned against the Fed moving too quickly on rates and said they would wait to see the impact of tariffs in economic data before making any policy shifts.
“There’s just great uncertainty here about the tariffs, how extensive they are going to be, how that’s going to economically impact us, how much the Fed might ease eventually and the economy in general,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.
“There is a lot of confusion out there, and when there’s confusion, when there isn’t a real opportunity for stocks to go up and for companies to expand and make more money, there’s fear.”
Adding to inflation concerns, U.S. import prices unexpectedly rose in February amid higher costs for consumer goods.
The Dow Jones Industrial Average fell 260.32 points, or 0.62%, to 41,581.31, the S&P 500 lost 60.46 points, or 1.07%, to 5,614.66 and the Nasdaq Composite lost 304.55 points, or 1.71%, to 17,504.12.
Stocks had recently shown some signs of stabilizing after several weeks of declines that sent the S&P 500 and Nasdaq down more than 10% from their recent highs, also known as correction territory.
The blue-chip Dow is slightly more than 2% away from reaching correction levels.
Growth stocks were among the hardest hit on Tuesday, with the S&P 500 growth index as much as 2.2% during the session. Communication services, down 2.14% was the worst performing of the 11 major S&P sectors.
Alphabet fell 2.2% after the company said it would buy Wiz for about US$32 billion in its biggest deal as the Google parent doubles down on cybersecurity.
Nvidia shares declined 3.35%. CEO Jensen Huang said the chipmaker was well placed to navigate a shift in the artificial intelligence industry, in which businesses are moving from training AI models to getting detailed answers from them.
Tesla stumbled 5.34% after brokerage RBC slashed its price target on the EV maker’s stock by US$120 to US$320, citing reduced expectations for its full self-driving pricing and robotaxi market share. Its shares are now down nearly 45% on the year.
Reflecting the defensive tone, investors moved to safe-haven assets, with gold trading at a record high, after crossing US$3,000 per ounce for the first time last week.
On the TSX, the technology sector fell 1.9%, with shares of electronics equipment firm Celestica Inc down 4.5%. Industrials lost 0.6% and financials ended 0.2% lower. The materials group added 0.4%.
Among TSX stocks, Definity Financial shares fell 3.3% after Swiss Re announced a sale of its 10.5% stake in the Canadian insurer.
Declining issues outnumbered advancers for a 1.69-to-1 ratio on the NYSE and a 1.93-to-1 ratio on the Nasdaq. The S&P 500 posted four new 52-week highs and four new lows, while the Nasdaq Composite recorded 32 new highs and 142 new lows. Volume on U.S. exchanges was 13.40 billion shares, compared with the 16.41 billion average for the full session over the last 20 trading days.
Reuters, Globe staff