U.S. and Canadian stocks closed slightly lower on Thursday after veering between gains and losses as investors gauged the latest round of economic data and the Federal Reserve’s policy statement against tariff concerns.
Selling pressure has intensified in recent weeks after a string of economic indicators signaled the economy and consumer sentiment may be cooling as the Trump administration imposes reciprocal trade tariffs.
Still, equities rose in three of the prior four sessions, with the benchmark S&P index rallying more than 1% on Wednesday after the Fed kept interest rates unchanged, as widely expected, and indicated two quarter-point interest-rate cuts were likely later this year, the same median forecast as three months ago.
The central bank also said it sees slower economic growth and at least temporarily higher inflation.
“The news is very volatile,” said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco. “The market’s pretty focused on it and a lot of it’s going to depend on how certain news items play out over the next couple of weeks.”
“We’re putting a bottom in here, but when I survey the near-term news flow, I don’t have a lot of hope that we’re going to suddenly leap out of this,” he added.
U.S. economic data on Thursday showed weekly initial jobless claims increased slightly last week, although the outlook may be dimming due to government spending cuts, interest rate levels and policy uncertainty.
The Conference Board in the U.S. reported that a measure of future economic activity fell 0.3% in February after easing 0.2% in January.
Market participants are pricing in 63 basis points of cuts from the Fed this year, with 71% odds for a cut of at least 25 basis points at the June meeting, according to LSEG data.
The Dow Jones Industrial Average fell 11.31 points, or 0.03%, to 41,953.32, the S&P 500 lost 12.40 points, or 0.22%, to 5,662.89 and the Nasdaq Composite lost 59.16 points, or 0.33%, to 17,691.63.
The S&P/TSX composite index ended down 8.97 points, or 0.04%, at 25,060.24, after posting on Wednesday its biggest advance in seven months.
Canadian Prime Minister Mark Carney is poised to call a snap federal election on Sunday for April 28, the Globe and Mail reported. Carney captured the Liberal leadership two weeks ago by persuading party members he was the best person to take on Trump.
“With the appointment of Carney as the PM some of the political risk might have declined,” said Elvis Picardo, portfolio manager at Luft Financial, iA Private Wealth. “The elections could be around the corner but even so the very fact that the nation is no longer headless, I think that’s a positive.”
The TSX has added 1.3% since the beginning of the year, which contrasts with a decline of 3.7% for U.S. benchmark the S&P 500.
“It could be a story of better valuations,” Picardo said. “We have seen rotation from the high flyers in the U.S. to beaten down markets like Europe and to some extent China and possibly Canada fits that better valuation story as well.”
The energy sector added 0.6% in Toronto on Thursday as the price of oil settled 1.6% higher at $68.26 a barrel after the United States issued new Iran-related sanctions.
Most other major sectors posted declines, with technology down 0.5%.
On Wall Street, technology was among the weakest of the 11 major sectors and the biggest downside weight, while energy advanced.
Company profit prospects have been dimming recently due to the uncertain tariff outlook, but Darden Restaurants shares jumped 5.77% after the Olive Garden owner gave a positive outlook regarding the impact of tariffs on its business.
Accenture shares tumbled 7.26%, its biggest daily percentage drop in a year, after the consultancy firm said the Trump administration’s efforts to reduce federal spending have led to delays and cancellations of new contracts.
Declining issues outnumbered advancers by a 1.38-to-1 ratio on the NYSE and by a 1.72-to-1 ratio on the Nasdaq. The S&P 500 posted 12 new 52-week highs and no new lows while the Nasdaq Composite recorded 31 new highs and 102 new lows. Volume on U.S. exchanges was 13.06 billion shares, compared with the 16.28 billion average for the full session over the last 20 trading days.
Reuters, Globe staff