TORONTO — Canada’s main stock index was down almost 150 points Monday with broad-based losses, while U.S. stock markets retreated further from last week’s gains.
The S&P/TSX composite index was down 142.37 points at 20,572.11.
In New York, the Dow Jones industrial average was down 260.99 points at 33,717.09. The S&P 500 index was down 52.79 points, or 1.3 per cent, at 4,017.77,while the Nasdaq composite was down 227.90 points, or almost two per cent, at 11,393.81.
Last week was strong for markets, especially in the U.S., on optimism that central banks were nearing the end of their rate-hike cycles, said Les Stelmach, senior vice-president and portfolio manager at Franklin Templeton Canada.
“There’s an expectation inflation’s turning the corner,” said Stelmach.
“Maybe a pause or a reversal of tightening is what people are starting to bet on.”
The Nasdaq, particularly sensitive to interest rate sentiment, gained more than four per cent last week.
With no major catalyst Monday, Stelmach said markets appeared to give up some of their gains in anticipation of a big news week ahead.
The Federal Reserve is set to announce its first interest rate decision of the year Wednesday, and is widely expected to hike again, but smaller than previous increases, echoing the Bank of Canada’s quarter of a percentage point hike last week.
Equally important will be the messaging from the central bank about where it intends to take interest rates for the rest of the year.
This week will also see earnings reports from major U.S. tech names like Apple, Amazon, and Google’s parent company.
The Canadian dollar traded for 74.87 cents US compared with 75.11 cents US on Friday.
With oil prices down Monday, the TSX energy index was down more than two per cent, while other index heavyweights like financials and industrials saw much smaller losses, helping stave off a larger slide. Meanwhile, technology also lost more than two per cent.
The March crude contract was down US$1.78 cents at US$77.90 per barreland the March natural gas contract was down 17 cents at US$2.68 per mmBTU.
The April gold contract was down US$6.40 at US$1,939.20 an ounce and the March copper contract was down two cents at US$4.20 a pound.
This report by The Canadian Press was first published Jan. 30, 2023.
Companies in this story: (TSX:GSPTSE, TSX_CADUSD=X)