TORONTO — Canada's main stock index was down almost 30 points Tuesday, led by weakness in energy and base metals, while U.S. markets also moved into the red after drifting higher for most of the day.
A late-day drop for Nvidia dragged U.S. markets lower heading into the bell, as shares in the technology giant dropped 2.53 per cent.
The S&P/TSX composite index closed down 29.76 points at 21,912.52.
In New York, the Dow Jones industrial average was down 31.31 points at 39,282.33. The S&P 500 index was down 14.61 points at 5,203.58,while the Nasdaq composite was down 68.80 points at 16,315.70.
This week is like a “pit stop” for markets in between big economic news, said Craig Fehr, head of investment strategy for Edward Jones.
Investors are coming off of inflation data and a U.S. Federal Reserve interest rate decision, and will get fresh U.S. labour data next week, he said.
“I think markets are using it as an opportunity really to just ... consolidate and catch (their) breath before we add more data to the pile,” said Fehr.
The end-of-day downturn Tuesday just illustrates how much sway Nvidia and the other major tech names have had on the market for a while now, said Fehr, but it doesn’t change the broader narrative of positive momentum on the market.
As the end of the quarter nears, you often see some rebalancing and repositioning on the markets, he added, leading to short-term moves.
The Fed appears on track to start cutting interest rates in the coming months after holding its key rate last week. The Bank of Canada is in a similar position.
The mood in markets right now is generally positive, with the “path of least resistance” an upward one, Fehr said.
“In the absence of some sort of negative news, I would say the market ... seems comfortable to drift slightly higher. And in the presence of good news, the market is happy to rally,” he said.
If the upcoming data disappoints, the ongoing broad-based rally means markets are more vulnerable to a knee-jerk reaction, said Fehr, but it would be a temporary one.
With earnings rising, a resilient economy — more so in the U.S. — and central banks poised to start cutting interest rates soon, “all of those conditions bode well for a bull market in stocks to continue,” he said.
Helping illustrate that confidence was another high-profile IPO on Tuesday after Reddit’s recent successful debut. This time it was Trump Media & Technology Group, which gained 16 per cent on its first day of trading.
The “reawakening” of the IPO market speaks to the momentum in the market currently, said Fehr.
The Canadian dollar traded for 73.68 cents UScompared with 73.62 cents US on Monday.
The May crude oil contract was down 33 cents at US$81.62 per barrel and the May natural gas contract was essentially unchanged at US$1.79 per mmBTU.
The June gold contract was up US$1.00 at US$2,199.20 an ounceand the May copper contract was down a penny at US$4.01 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published March 26, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Rosa Saba, The Canadian Press
