TORONTO — Canada's main stock index lost more than 100 points Tuesday ahead of an expected interest rate cut Wednesday, while U.S. markets were also down.
The S&P/TSX composite index closed down 121.09 points at 25,504.33.
In New York, the Dow Jones industrial average was down 154.10 points at 44,247.83. The S&P 500 index was down 17.94 points at 6,034.91, while the Nasdaq composite was down 49.45 points at 19,687.24.
“Relative to the churn we have seen in the markets the last few days ... today being a little bit of a boring day would be fairly welcome for many investors,” said Stephen Duench, vice-president and portfolio manager for AGF Investments Inc.
Wednesday is set to be more exciting, with an interest rate cut expected in Canada and important consumer inflation data coming in the U.S.
“I do expect a little bit more fireworks tomorrow,” said Duench.
The Bank of Canada is widely expected to announce an outsized cut Wednesday of half a percentage point, he said.
“Anything other than that would be a surprise.”
The U.S. Federal Reserve has its last decision of the year scheduled for next week, and market watchers are leaning toward a smaller quarter-percentage-point cut there, said Duench. It would be the third cut this year after the central bank hiked rates to a two-decade high to fight inflation.
The inflation report will be the last significant data point before the central bank’s decision, Duench said.
If the inflation report shows price growth is proving more stubborn than expected, that could change the Fed’s thinking on rates next week, he said.
“Maybe that's part of the reason we've seen churn in the market the last few days in the U.S.”
Beneath the surface, there was some movement in the tech sector, where Oracle sank 6.7 per cent after its latest earnings report missed expectations.
Meanwhile, Google's stock price rose by more than five per cent. The company on Tuesday unveiled its new chip meant for quantum computing.
Duench said after the advent of artificial technology led a rally earlier this year, quantum computing could be another frontier for investors to keep an eye on.
The Canadian dollar traded for 70.59 cents US compared with 70.77 cents US on Monday.
The January crude oil contract was up 12 cents at US$68.59 per barrel and the January natural gas contract was down two cents at US$3.16 per mmBTU.
The February gold contract was up US$32.60 at US$2,718.40 an ounce and the March copper contract was down less than a penny at US$4.27 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Dec. 10, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Rosa Saba, The Canadian Press