Negative Vibes Resume for TSX

Ford Decrease Looms Large

Equities in Toronto suffered severe bruises Tuesday, as investor worry about interest rate measures being taken by the U.S. central bank worth their way into the mix.

The TSX Composite erased Monday’s gains and then some, retreating 193.69 points, or 1%, to close trading Tuesday at 19,368.69.

The Canadian dollar backpedaled 0.65 cents to 74.86 cents against its U.S. counterpart.

Among the TSX sectors, real-estate was hit the hardest, with Dream Industrial REIT handed back 57 cents, or 4.8%, to $11.36, while Boardwalk REIT fell $2.15, or 4.4%, to $46.46.

In techs, Shopify faltered $2.29, or 5.3%, to $41.36, while HUT 8 Mining lost a dime, or 3.9%, to $2.45.

In health-care, Aurora Cannabis slid seven cents, or 3.6%, to $1.87, while Canopy Growth backed off 15 cents, or 3.5%, to $4.13

On the economic slate, Statistics Canada said its consumer price index rose 7.0% on a year-over-year basis in August, down from a 7.6% gain in July.

On a seasonally adjusted monthly basis, the CPI rose 0.1% in August.

Inflation numbers could influence traders' expectations around interest rate hikes by the Bank of Canada (BoC) ahead of a policy meeting next week.

Money market traders have fully priced in a 50-basis-point rate hike by the BoC. The central bank has already raised rates by 300 basis points in just six months to 3.25%, a 14-year high.

ON BAYSTREET

The TSX Venture Exchange cratered 9.2 points, or 1.5%, to 616.72.

All 12 TSX subgroups were negative on the day, with real-estate settling 3%, information technology and health-care each down 2.2%.


ON WALLSTREET

Stocks tumbled on Tuesday as the selloff on Wall Street mounted and investors braced for another large rate hike due out Wednesday from the Federal Reserve.

The Dow Jones Industrials stumbled 313.45 points, or 1%, to conclude Tuesday at 30,706.23.

The S&P 500 retreated 43.96 points, or 1.1%, to 3,855.93.

The NASDAQ Composite let go of 109.97 points, or 1%, to 11,425.05.

Meanwhile, Ford shares slumped after announcing that supply chain issues would cost an extra $1 billion in the third quarter.

The Federal Open Markets Committee begins its September meeting on Tuesday, where central bankers are expected to announce a 0.75 percentage point rate hike on Wednesday.

Stocks have tumbled in recent weeks as comments from Fed Chair Jerome Powell and an unexpectedly hot August consumer price index report caused traders to prepare for even higher rates until inflation cools.

Housing market data released Tuesday showed an unexpected jump in starts for August, although building permits saw the biggest decline since April 2020.

Investors are focused on the Fed’s latest policy meeting slated to begin Tuesday. The central bank is expected to raise interest rates by another three-quarters of a point, though investors are also watching for guidance about corporate earnings before the next reporting season begins in October.

Treasury prices lost sharply, raising yields to 3.56% from Monday’s 3.49%. Treasury prices and yields move in opposite direction.

Oil prices slumped $1.54 to $84.19 U.S. a barrel.

Gold prices lost $4.30 to $1,673.90 U.S. an ounce.