TORONTO — Canada's main stock index lost nearly 250 points Thursday, led by weakness in energy and base metals, while U.S. markets also fell.
The S&P/TSX composite index closed down 246.99 points at 25,410.71.
In New York, the Dow Jones industrial average was down 234.44 points at 43,914.12. The S&P 500 index was down 32.94 points at 6,051.25, while the Nasdaq composite was down 132.05 points at 19,902.84.
“I think the markets had some time to now digest where rates could be going into the near term,” said Adelaide Chiu, portfolio manager, vice-president and head of responsible investing at NEI Investments.
On Wednesday, the Bank of Canada announced an outsized half-percentage point interest rate cut and signalled it would slow the pace of cuts going forward.
“With the policy rate now substantially lower, we anticipate a more gradual approach to monetary policy if the economy evolves broadly as expected," said Bank of Canada governor Tiff Macklem.
And in the U.S., the monthly report on consumer inflation came in largely as expected, helping set the stage for a quarter-point cut by the U.S. Federal Reserve next week.
Globally, interest rate cuts are moderating as inflation reaches targets, Chiu said.
On Thursday, the European Central Bank cut rates by a quarter of a percentage point while the Swiss National Bank cut by half a percentage point.
A year ago, market watchers couldn’t have predicted just how much equities would rise in 2024, said Chiu.
“Earnings growth itself has been quite modest, but the market has done very well,” she said.
“It’s really a movement of the interest rates that has really impacted valuations for a lot of these companies in the market.”
Now, the news is largely focused on the incoming U.S. president and whether his threatened tariffs will come to pass, Chiu said.
The Canadian dollar traded for 70.48 cents US compared with 70.65 cents US on Wednesday.
The January crude oil contract was down 27 cents at US$70.02 per barrel and the January natural gas contract was up eight cents at US$3.46 per mmBTU.
The February gold contract was down US$47.30 at US$2,709.40 an ounce and the March copper contract was down a penny at US$4.20 a pound.
-- With files from The Associated Press
This report by The Canadian Press was first published Dec. 12, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Rosa Saba, The Canadian Press