Rough day for markets
The Canadian Press - Jan 31, 2024 - Business Buzz

Photo: The Canadian Press

TORONTO — Canada’s main stock index fell more than 200 points Wednesday on broad-based weakness, while U.S. markets also fell, led by losses in the tech sector.

Markets were mixed for much of the day, led by weakness in tech, but after the U.S. Federal Reserve’s interest rate decision, they slid for the rest of the afternoon, with the Nasdaq ending the day 2.2% lower and the S&P 500 down 1.6%.

The S&P/TSX composite index was down 205.99 points at 21,021.88.

In New York, the Dow Jones industrial average was down 317.01 points at 38,150.30. The S&P 500 index was down 79.32 points at 4,845.65, while the Nasdaq composite was down 345.88 points at 15,164.01.

The biggest factor driving markets lower Wednesday was weakness among major tech companies after some of the biggest names reported earnings, said Jules Boudreau, senior economist at Mackenzie Investments.

Alphabet shares were down more than 7%, while Microsoft lost 2.7%, even though both companies delivered stronger profit and revenue than expected. Meanwhile, Tesla shares fell after a Delaware judge ruled CEO Elon Musk isn’t entitled to his compensation package, while Advanced Micro Devices saw shares slump after its revenue forecasts fell short of estimates.

“In general, I think that’s what’s been driving the weakness,” Boudreau said.

Adding to the weight on equities was the interest rate announcement, Boudreau said. While the central bank’s rate hold came as no surprise, the statement it offered was more hawkish than expected. The Fed made clear that it needs more confidence in inflation’s march toward 2% before it can reduce rates.

“We’re not declaring victory at all,” said chairman Jerome Powell, adding it’s unlikely that the central bank will get enough confidence to cut by March. “It’s probably not the most likely case.”

The Canadian dollar traded for 74.64 cents US, compared with 74.53 cents US on Tuesday.

The March crude contract was down US$1.97 at US$75.85 per barreland the March natural gas contract was up two cents at US$2.10 per mmBTU.

The April gold contract was up US$16.50 at US$2,067.40 an ounceand the March copper contract was up half a penny at US$3.91 a pound.

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