Canada's main stock index opened lower on Tuesday as commodity-linked stocks fell on weak crude and gold prices after data showed monthly U.S. consumer prices unexpectedly rose in August, setting the stage for another aggressive rate hike from the Federal Reserve next week.
The TSX Composite handed over much of its gains, 163.6 points worth, to begin Tuesday’s session at 19,823.61.
The Canadian dollar dropped 0.49 cents higher to 76.55 cents.
ON BAYSTREET
The TSX Venture Exchange plummeted 8.24 points, or 1.3%, to 651.30
All but one of the 12 TSX subgroups were lower to kick off Tuesday, with information technology dropping 2.5%, health-care down 2.1%, and real-estate off 1.8%.
The lone positive was in energy, better by 0.1%>
ON WALLSTREET
Stocks fell sharply on Tuesday after a key August inflation report came in hotter than expected, hurting investor optimism for cooling prices and a less aggressive Federal Reserve.
The Dow Jones Industrials headed in the other direction from Monday’s dizzy gains, falling 746.26 points, or 2.3%, to begin Tuesday at 31,635.08
The S&P 500 deleted 108.51 points, or 2.6%, to 4,001.90.
The NASDAQ Composite fell back 406.94 points, or 3.3%, to 11,859.47.
More than 480 stocks in the S&P 500 fell, with Facebook-parent Meta dropping 5.5% and Caesars Entertainment losing 5.7%.
The August consumer price index report showed a higher-than-expected reading for inflation. Headline inflation rose 0.1% month over month, even with falling gas prices. Core inflation rose 0.6% month over month. On a year-over-year basis, inflation was 8.3%.
Economists surveyed by Dow Jones had been expecting a decline of 0.1% for overall inflation, with a rise of 0.3% for core inflation.
The report is one of the last the Fed will see ahead of its Sept. 20-21 meeting, where the central bank is expected to deliver their third consecutive 0.75-percentage-point interest rate hike to tamp down inflation. The unexpectedly high August report could lead the Fed to continue its aggressive hikes longer than some investors anticipated.
Treasury prices fell hard Tuesday, raising yields to 3.44% from Monday’s 3.35%. Treasury prices and yields move in opposite direction.
Oil prices dipped 0.07 cents to $87.71 U.S. a barrel.
Gold prices sank $24.50 to $1,716.10 U.S. an ounce.
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