Stocks in Toronto opened sharply lower., with the materials sector leading the decline, after hotter-than-expected inflation figures prompted investors to scale back bets for an interest rate cut at the Bank of Canada's upcoming meeting.
The TSX was thumped 491.29 points, or 1.6%, to open Tuesday at 29,925.15.
The Canadian dollar dipped 0.04 cents to 71.22 cents U.S.
Despite recent market volatility, the Canadian benchmark remains near all-time highs, supported by rising gold prices and optimism about artificial intelligence from Wall Street.
In the economic docket, Statistics Canada said its consumer price index (CPI) rose 2.4% year over year in September, up from a 1.9% increase in August.
On a seasonally-adjusted monthly basis, the CPI rose 0.4% in September. The inflation reading could prove decisive for the BoC's upcoming monetary policy decision, with traders currently pricing in about 90% chance of a 25-basis-point cut.
On the trade front, The Globe and Mail reported on Tuesday that a U.S.-Canada trade deal covering steel, aluminum and energy could be ready for Prime Minister Mark Carney and U.S. President Donald Trump to sign at the Asia-Pacific Economic Cooperation summit later this month.
ON BAYSTREET
The TSX Venture Exchange descended 38.77 points, or 3.9%, to begin Tuesday at 944.59.
Eight of the 12 TSX subgroups were lower in the first hour, as gold paled 8.4%, materials sank 7.3%, and information technology was weaker 1.3%.
The four gainers were co-led by consumer staples and financials, each up 0.2%, while real-estate gathered 0.03%.
ON WALLSTREET
The S&P 500 was relatively unchanged on Tuesday as investors digested a slew of earnings results and took a breather following a rally in the previous session.
The Dow Jones Industrials gained another 202.61 points to begin Tuesday at 46,909.19.
The much-broader index eked ahead 0.88 points to 6,736.01.
The tech-heavy NASDAQ lost 42.75 points, however, to 22,947.79.
A trio of old economy stocks saw gains on the heels of better-than-expected quarterly results. General Motors soared 13% after it hiked its guidance for the full year and topped estimates. The Detroit automaker also lowered its estimated impact from President Donald Trump’s tariffs for the year, saying that it expects to offset about 35% of that hit.
Additionally, Coca-Cola and 3M jumped 3% and more than 2%, respectively, after their latest releases also surpassed Wall Street’s estimates.
Meanwhile, other names like Zions Bancorp were 2% higher after the regional bank reported third-quarter profits that rose from a year ago, despite the disclosure of some bad loans late last week that sparked a broader market rout.
Investors are monitoring a crucial week ahead for third-quarter earnings, which are revving up with Netflix set to report after the bell Tuesday and Tesla due Wednesday.
A strong start to the earnings season appears to be supporting the broader market rally, particularly amid an economic data blackout due to the government shutdown.
More than three-quarters of the S&P 500 companies that have posted results so far have beaten expectations, according to FactSet. Major tech companies are expected to account for a dominant portion of profits as the artificial intelligence trade remains strong, with the “Magnificent Seven” companies expected to report year-over-year earnings growth of 14.9%, compared with 6.7% for the index’s remaining 493 companies.
Prices for the 10-year Treasury nicked up, lowering yields to 3.96% from Monday’s 3.98%. Treasury prices and yields move in opposite directions.
Oil prices faded 22 cents to $57.30 U.S. a barrel.
Gold prices revived $171.60 to $4,187.80 U.S. an ounce.
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