Canada’s main stock index gave back on Thursday some of its monthly gain, with energy and technology shares declining as investors assessed corporate earnings and uncertain prospects for a trade deal between Canada and the United States. U.S. stocks also closed lower, shedding earlier gains.
The S&P/TSX composite index ended down 110.18 points, or 0.4%, at 27,259.78, extending its pullback from a record closing high on Tuesday. For the month, the index was up 1.5%, its third straight monthly gain.
“While corporate profits are in the spotlight this week and today ... we still have a relatively favorable backdrop as the U.S. and Canadian economies are holding up ok despite some of the trade uncertainty that still persists, especially in Canada,” said Angelo Kourkafas, senior global investment strategist at Edward Jones.
Canadian gross domestic product decreased by 0.1% in May on a monthly basis but preliminary estimates showed the economy regaining the lost ground in June and posting annualized growth of 0.1% for the second quarter. The Bank of Canada has projected a second-quarter contraction of 1.5%.
U.S. President Donald Trump has intensified his trade war with Canada ahead of his August 1 deadline for a tariff agreement, saying it would be “very hard” to make a deal with Canada after it gave its support to Palestinian statehood.
The energy sector in Toronto fell 1.2% as the price of oil settled 1.1% lower at $69.26 a barrel. Technology lost 1% and industrials were down 0.8%.
Bombardier shares dipped 0.7%. The business jet maker reported a slight drop in second-quarter revenue, though its net income beat analyst expectations.
Luxury goods maker Canada Goose Holdings posted a bigger-than-expected quarterly loss. Its shares tumbled 14.3%, while shares of Bausch Health Companies ended 7.7% lower after the pharmaceutical firm reported its quarterly results.
Of ten major sectors, only materials, which includes metal mining shares, ended higher. It rose 0.5% as the price of gold clawed back some recent declines.
On Wall Street, it was a session of investors taking in the latest round of corporate earnings and economic data.
Microsoft shares rose 3.5% after it posted a strong earnings report and briefly surpassed the US$4 trillion market cap threshold, becoming only the second publicly traded company to ever touch the milestone after Nvidia.
Meta Platforms surged 11.3% to close at a record high of $773.44 as AI-driven growth in its core ad business powered a bullish revenue forecast.
Still, other AI-related names were weaker on the session. Names such as chipmakers Broadcom, which lost 2.9%, and Nvidia, off 0.8%, weighed on the PHLX semiconductor index. The chip index dropped 3.1% for its biggest daily percentage decline since April 16.
Of the 297 companies in the S&P 500 that have reported earnings through Thursday morning, 80.8% have topped analyst expectations, according to LSEG data, compared with the 76% beat rate over the past four quarters.
After the closing bell, Amazon shed 2.6% in extended trade after reporting quarterly results but Apple, which released results well ahead of estimates, was up 2%.
The Dow Jones Industrial Average closed down 330.30 points, or 0.74%, to 44,130.98, the S&P 500 lost 23.51 points, or 0.37%, to 6,339.39 and the Nasdaq Composite lost 7.23 points, or 0.03%, to 21,122.45.
The S&P 500 had risen as much as 1% and the Nasdaq as much as 1.5% earlier in the session. The Nasdaq has not logged a move of at least 1% in either direction since July 3 while the S&P last recorded a daily 1% move on June 24.
Earlier economic data from the Commerce Department report showed inflation picked up in June, with new tariffs pushing prices higher and stoking expectations that price pressures could intensify in the coming months, while weekly U.S. initial jobless claims signaled the labor market remained on stable footing.
Investors will now eye Friday’s non-farm payrolls report and a looming tariff deadline, as U.S. President Donald Trump was expected to issue higher final duty rates for countries that have not reached an agreement, although Mexico was granted a 90-day reprieve.
U.S. stocks have rallied after a sharp selloff that began in early April after Trump announced a bevy of sharp tariffs, only to rebound as deals have been struck with many trading partners on duty levels.
For the month, the S&P 500 gained 2.17%, the Nasdaq rose 3.7%, and the Dow climbed 0.08%. The Dow, S&P 500 and Nasdaq recorded their third straight monthly gain.
Drug stocks were also weaker after the White House said Trump sent letters to the CEOs of 17 major pharmaceutical companies, urging immediate action to lower the cost of prescription drugs for Americans. The NYSE Arca pharmaceutical index slumped 2.9%, its biggest drop since May 14 and fourth straight session of declines.
Declining issues outnumbered advancers by a 1.55-to-1 ratio on the NYSE, and by a 1.98-to-1 ratio on the Nasdaq. The S&P 500 posted 35 new 52-week highs and 28 new lows while the Nasdaq Composite recorded 70 new highs and 141 new lows. Volume on U.S. exchanges was 19.65 billion shares, compared with the 18.01 billion average for the full session over the last 20 trading days.
Reuters, Globe staff