Canada's main stock index tumbled on Wednesday after the country's central bank raised rates by an unexpected full percentage point and lifted its inflation forecast, while hot U.S. inflation data bolstered bets for aggressive monetary policy tightening by the Federal Reserve.
The S&P/TSX lost 125.43 points to pause for lunch Wednesday at 18,553.21.
The Canadian dollar jumped 0.05 cents to 76.77 cents U.S.
Gold stocks moved upward, with Barrick Gold up 29 cents, or 1.4%, to $21.67.
In consumer staples, Loblaw Companies hurtled $2.79, or 2.4%, to $120.16.
Industrials tumbled, though, with Air Canada grounded 39 cents, or 2.4%, to $16.36.
The Bank of Canada today increased its target for the overnight rate to 2.5%, with the Bank Rate at 2.75% and the deposit rate at 2½%.
ON BAYSTREET
The TSX Venture Exchange dropped 2.79 points to 589.91.
All but three of the 12 TSX subgroups were lower, as health-care slid 2%, industrials fell 1.6%, and information technology dipped 1.3%.
The three gainers proved to be gold, up 0.4%, energy, inching ahead 0.2%, and materials, eking up 0.04%.
ON WALLSTREET
Stocks slipped on Wednesday after June inflation data came in hotter-than-expected, contributing to growing fears that the Federal Reserve will get more aggressive in its fight to tame rising prices.
The Dow Jones Industrials came off their lows of the morning, but were still negative 206.9 points to 30,774.43.
The S&P 500 lost 19.44 points to 3,799.36.
The NASDAQ Composite dropped 37.31 points to 11,227.53.
All major S&P 500 sectors declined on Wednesday, with the exception of consumer discretionary boosted by gains in tech. Shares of Boeing,
Dow and Walgreens slid more than 1% each, dragging the Dow into negative territory.
Battered tech shares Amazon and Tesla staged a comeback on Wednesday, rising more than 1% each despite mounting growth concerns.
The move briefly brought the tech-heavy NASDAQ into positive territory. Twitter’s stock rose 6.4% as the social media company sued Elon Musk.
Along with the inflation report, investors continued to monitor second-quarter earnings for clues into the health of U.S. companies. Delta Air Lines shares dropped 6.3% after posting mixed results.
Amid the news, United dipped 2%, and American Airlines lost 5%. Struggling cruise stocks Norwegian, Royal Caribbean and Carnival each fell about 2%.
The consumer price index rose 9.1% on a year-over-year basis in June, coming in even higher than May’s 8.6% reading, which was the biggest increase since 1981. Economists surveyed by Dow Jones’ had anticipated an 8.8% print.
Core CPI, which excludes food and energy prices, came in at 5.9% and above the 5.7% estimate.
Treasury prices gained ground, lowering yields to 2.95% from Tuesday’s 2.97%. Treasury prices and yields move in opposite directions.
Oil prices fell 29 cents to $95.55U.S. a barrel.
Gold prices regained $12.30 to $1,737.10 U.S. an ounce.
