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Markets Dip with Energy Stocks

Ero, GFL in Focus

Canada's main stock index slipped on Monday in a volatile session, led by losses in energy stocks tracking lower oil prices, while investors awaited the Bank of Canada's interest rate decision and other economic data due this week.

The S&P/TSX Composite Index backtracked 132.65 points to move into Monday afternoon at 22,136.47.

The Canadian dollar dropped 0.02 cents at 73.40 cents U.S.

Materials stocks, also under selling pressure, were down 0.1%, led by losses in metal miners such as Filo Corp, SilverCrest Metals and Ero Copper Corp, among others. Filo shares sagged 62 cents, or 2.5%, to $24.55, while SilverCrest ditched 24 cents, or 2%, to $11.95, and Ero shares slid 79 cents, or 2.7%, to $28.23.

Among individual stocks, shares of GFL Environmental jumped $3.74, or 8.7%, to $46.65 to touch a near four-week high after a report said the waste management firm was considering potential offers from private-equity firms.

The main event for the week would be the BoC's rate decision on Wednesday. The central bank is expected to trim interest rates to 4.75%, according to three-quarters of economists in a Reuters poll that showed three further cuts this year, with the last one hanging on a knife's edge.

Elsewhere on the economic ledger, the Markit Canada Manufacturing PMI for May decreased to 49.30 points in May from 49.40 points in April. Manufacturing PMI in Canada averaged 52.42 points from 2011 until 2024, reaching an all time high of 58.90 points in March of 2022 and a record low of 33 points in April of 2020.

ON BAYSTREET

The TSX Venture Exchange hesitated 2.58 points to 608.29.

Seven of the 12 subgroups lost ground midday, weighed most by energy, plummeting 2.8%, while industrials and health-care each tapered off 0.8%.

The five gainers were led by gold, better by 0.6%, real-estate, climbing 0.4%, and materials, improving 0.2%.

ON WALLSTREET

The S&P 500 fell on Monday as investors struggled to carry the market’s strong May momentum into the new month.

The Dow Jones Industrials collapsed 248.97 points to 38,436.35.

The much-broader index slumped 8.55 points to 5,268.96.

The NASDAQ remained positive 54.08 points to 16,789.10.

A technical issue at the New York Stock Exchange affected price quotes for several stocks. The NYSE said it was investigating a technical issue related to the limit up and limit down bands, but it was unclear how many stocks were affected.

Elsewhere, the U.S. manufacturing sector showed signs of slowing, with the ISM manufacturing index measuring 48.7 in May, sending Treasury yields and the dollar lower. A reading below 50 is an indication of a contraction. Cyclical stocks whose fortunes are closely tied to economic growth such as energy, industrial and materials companies led the decline.

Nvidia rose 2% higher after announcing a new suite of artificial intelligence chips, succeeding the previous model by just three months.

Elsewhere, the U.S. manufacturing sector showed signs of shrinkage last month, with the ISM manufacturing index measuring 48.7 in May, which sent yields lower. A reading below 50 is an indication of a contraction.

The three averages all closed May more than 1% below their record highs, even with the Dow adding more than 500 points on Friday. The NASDAQ fell 1.1% last week as chip stocks, including Nvidia, stumbled.

The first week of June is brimming with further economic updates. Investors also await private payroll data on Thursday from ADP followed by a key jobs report on Friday.

Prices for the 10-year Treasury gained a bit of ground, lowering yields to 4.41% from Friday’s 4.50%. Treasury prices and yields move in
opposite directions.

Oil prices shed $2.82 to $74.17 U.S. a barrel.

Gold prices docked $16.80 to $2,362.60.