TORONTO — Canada's main stock index fell on Wednesday, led by technology and base metals, while U.S. markets were also down ahead of a much-anticipated earnings report from Nvidia.
The Nasdaq fell 1.1 per cent as large tech stocks led the way lower.
Investors moved with caution in a risk-off day ahead of earnings coming from Nvidia after the bell, said Angelo Kourkafas, senior investment strategist at Edward Jones.
“Given the rally that we have seen in the markets over the last two weeks, it is not surprising to see markets catch their breath and be a little cautious ahead of this very important earnings release,” he said.
The earnings report from the semiconductor giant is likely to set the tone for the rest of the week, said Kourkafas, noting that the bar is high for the company that’s helped lead a narrow rally so far this year.
“The stock is up 160 per cent year to date, so investors will be sensitive to any upside or downside surprises, which could produce an outsized reaction,” he said.
In New York, the Dow Jones industrial average was down 159.08 points at 41,091.42. The S&P 500 index was down 33.62 points at 5,592.18, while the Nasdaq composite was down 198.79 points at 17,556.03.
The S&P/TSX composite index closed down 132.98 points at 23,126.98.
Next week, U.S. market watchers will get fresh data on the job market, a key data point as the next interest rate decision from the central bank looms.
A 25-basis-point cut is expected from the U.S. Federal Reserve, said Kourkafas, but signs of a weakening economy could boost calls for a 50-basis-point cut.
So far, the economic data doesn’t justify that, he said.
“We still continue to see some economic resilience, which does not suggest that emergency cuts or any outsized cuts are warranted at this time. But clearly, the focus is on the labour market, and any signs of further weakening there could potentially trigger a larger cut,” he said.
Meanwhile, the Bank of Canada is expected to announce another cut next week, said Kourkafas.
Earnings from the major Canadian banks continued to roll in Wednesday, with more positive showings than earlier reports.
Royal Bank of Canada reported higher profit than anticipated, while National Bank also beat expectations.
The Canadian dollar traded for 74.23 cents US compared with 74.29 cents US on Tuesday.
The October crude oil contract was down US$1.01 at US$74.52 per barrel and the October natural gas contract was up a penny at US$2.10 per mmBTU.
The December gold contract was down US$15.10 at US$2,537.80 an ounce and the December copper contract was down eight cents at US$4.22 a pound.
-- With files from The Associated Press
This report by The Canadian Press was first published Aug. 28, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Rosa Saba, The Canadian Press
