Canada’s main stock index gave away early gains to trade lower on Wednesday after the Bank of Canada said it was prepared to hike interest rates aggressively to combat surging inflation.
The S&P/TSX dipped 99.96 points around noon to 20,629.38.
The Canadian dollar faded 0.18 cents to 78.93 cents U.S.
Health-care stocks joined in the unison chorus of negative groups, as Aurora Cannabis tailed off 18 cents, or 8.5%, to $1.95, while rival Canopy Growth dropped 34 cents, or 5.4%, to $5.99.
One of the few bright spots came in the energy sector, with Parex Resources making its way higher 39 cents, or 1.4%, to $28.40, while Vermilion Energy towered 92 cents, or 3.4%, to $28.28.
On the economic calendar, the Markit Purchasing Managers Index for May registered 56.8 in May, up from 56.2 in April.
The central bank this morning increased its target for the overnight rate to 1.5%, with the Bank Rate at 1.75% and the deposit rate at 1.5%.
ON BAYSTREET
The TSX Venture Exchange stumbled 15 points, or 2.1%, to 705.98.
All but two of the 12 TSX subgroups lost ground midday, as health-care swooned 3.5%, information technology lost 1.7%, and real-estate handed over 1.5%.
The two gainers proved to be energy and industrials, each up 0.5%.
ON WALLSTREET
U.S. stocks pulled back Wednesday amid worries about the health of the economy, as Wall Street turned the page to another month following a volatile May.
The Dow Jones Industrials slumped 320.01 points, to break for lunch at 32,670.11.
The S&P 500 dropped 45.47 points, or 1.1%, to 4,086.57
The NASDAQ Composite lost 136.08 points, or 1.1%, to 11,945.31.
Weighing on investor sentiment, JPMorgan CEO Jamie Dimon on Wednesday said the economy is headed for a “hurricane.”
“You better brace yourself,” Dimon said at a financial conference. “JPMorgan is bracing ourselves and we’re going to be very conservative with our balance sheet.”
Fresh economic data released Wednesday morning showed job openings declined sharply in April.
Materials names typically linked to the economic cycle were among the biggest laggards on the S&P 500. Albemarle dropped more than 9% and Mosaic shed about 6%.
Travel names also struggled Wednesday. Boeing was the worst decliner on the Dow, down about 3%. On the S&P 500, Norwegian Cruise Line fell around 6% and Delta Air Lines eased more than 4%.
On the upside, Salesforce surged more than 11% after the company’s first-quarter results topped expectations.
Traders in May pored over a raft of mixed quarterly results that included some big misses from bellwether names like Walmart.
Meanwhile, the Federal Reserve at the start of May hiked rates by 50 basis points to quell an inflationary surge not seen in decades.
The first day of June marks the start of the Fed’s plan to reduce its balance sheet, which ballooned to nearly $9 trillion during the COVID pandemic.
Treasury prices crumbled, raising yields to 2.93% from Tuesday’s 2.86%. Treasury prices and yields move in opposite directions.
Oil prices jumped $1.24 to $115.91 U.S. a barrel.
Gold prices slid $2.60 to $1,840.10 U.S. an ounce.