Stocks oscillated on Wednesday, as investors juggled spiking crude prices, central bank interest-rate decisions, and a quartet of high-profile earnings released after the closing bell.
Oil was at the centre of much of the market’s attention, spiking to multi-week highs and prompting money markets to price in a higher likelihood of rate hikes in the months ahead in both Canada and the U.S.
Traders are now pricing in 59 basis points of Bank of Canada rate hikes this year, up from 39 basis points a day earlier, swap market data showed. Rising energy prices have revived fears of broader inflation, even as the Federal Reserve concluded what is probably its last policy meeting of the Jerome Powell era by leaving its key interest rate unchanged, as expected.
Crude prices jumped after the White House confirmed reports that U.S. President Donald Trump told officials to prepare for a prolonged blockade of Iranian ports, which suggests ongoing supply pressures due to restricted traffic in the crucial Strait of Hormuz.
“The longer this conflict in Iran goes and energy prices remain elevated, and the global uncertainty remains, there will be an expectation of that having some sort of effect on spending habits, which will show up at some point in some level in the next round of corporate earnings,” said Matthew Keator, managing partner in the Keator Group, a wealth management firm in Lenox, Massachusetts.
A White House official said Trump had met with top officials from Chevron and other energy companies to talk about possible steps to calm oil markets in case a prolonged blockade of Iranian ports continues for months.
The three major U.S. stock indexes gyrated after the Fed’s policy statement revealed the decision to hold rates steady was its most divided since 1992, along with uncertainties concerning rising energy prices due to turmoil in the Middle East.
It was likely the Fed’s last policy meeting under Powell, who vowed at the subsequent press conference that he would stay on as governor.
Earlier in the day, the Bank of Canada also kept its trend-setting interest rate unchanged, but said if oil prices stayed high and began pushing up inflation, it might have to respond with consecutive rate hikes.
Meanwhile, four of the companies that comprise the Magnificent Seven group of artificial intelligence-related megacap firms - Amazon, Alphabet, Meta Platforms and Microsoft - released quarterly results after the bell.
In extended trading, Alphabet shares were up over 3%, Amazon and Microsoft were down more than 3% and Meta was off more than 6%.
On the economic front, new orders for U.S. core capital goods, considered a barometer of corporate capex plans, jumped 3.3% in March, the largest monthly increase since June 2020.
The Dow Jones Industrial Average fell 280.12 points, or 0.57%, to 48,861.81, the S&P 500 lost 2.82 points, or 0.04%, to 7,135.98 and the Nasdaq Composite gained 9.44 points, or 0.04%, to 24,673.24.
Among the 11 major sectors of the S&P 500, energy stocks, benefitting from the jump in crude prices, led the gainers. Utilities and materials suffered the steepest percentage losses.
The S&P/TSX composite index ended down 265.95 points, or 0.8%, at 33,318.39, marking its lowest closing level since April 7. It was the fifth straight daily decline for the index, the longest losing streak since December 2024.
The materials sector, which includes Canadian metal miners, was down 2.3%. The price of gold fell 1.1% to hit a near one-month low.
Industrials lost 1.6%, with shares of Canadian National Railway Co down 6% after the company’s earnings missed estimates.
CGI Inc met earnings expectations. Still, shares of the information technology consulting services company ended 10.8% lower.
Energy in Toronto added 2.7% as the price of U.S. oil settled nearly 7% higher at US$106.88 a barrel.
In the U.S., Robinhood Markets fell 13.2% after the online brokerage missed first-quarter profit expectations.
Shares of data-storage companies climbed following an upbeat fourth-quarter forecast from Seagate Technology. Seagate jumped 11.1%, while peers SanDisk and Western Digital gained 6.2% and 5.6%, respectively.
Starbucks advanced 8.5% after raising its annual profit forecast.
Visa jumped 8.3% after the payments processing company raised its forecast for full-year earnings.
NXP Semiconductors surged 25.5% after providing second-quarter revenue and revenue expectationsthat beat Wall Street estimates.
Declining issues outnumbered advancers by a 2.52-to-1 ratio on the NYSE. There were 187 new highs and 84 new lows on the NYSE. On the Nasdaq, 1,474 stocks rose and 3,347 fell as declining issues outnumbered advancers by a 2.27-to-1 ratio. The S&P 500 posted 20 new 52-week highs and 25 new lows while the Nasdaq Composite recorded 85 new highs and 124 new lows. Volume on U.S. exchanges was 16.37 billion shares, compared with the 17.81 billion average for the full session over the last 20 trading days.
Reuters, Globe staff