Canada’s primary stock index experienced slight gains on Wednesday as the energy and technology sectors, along with others, countered the weakness in base metals. Conversely, the U.S. markets were mixed.
According to Michael Currie, a senior investment adviser at TD Wealth, markets were volatile on Wednesday. Some sectors saw gains while others declined, without any noticeable pattern in the movements.
The S&P/TSX composite index rose by 85.76 points to reach 19,818.85.
Meanwhile, in New York, the Dow Jones industrial average fell by 74.08 points to 33,852.66. The S&P 500 index decreased by 1.55 points to 4,376.86, while the Nasdaq composite increased by 36.08 points to 13,591.75.
Currie observed a significant downward trend among semiconductor companies, particularly Nvidia and Taiwan Semiconductor Manufacturing Co. Ltd., which both experienced declines of 1.8% and 1.14%, respectively.
Currie attributed these declines to a report suggesting that the Biden administration is considering limiting the sale of AI chips to China. This news significantly impacted the stocks in this sector.
Investors also closely monitored the European Central Bank’s monetary policy conference in Sintra, Portugal, which was attended by Jerome Powell, the chairman of the Federal Reserve. During a panel discussion, Powell stated that “policy hasn’t been restrictive enough for long enough.”
The majority of the central bank leaders on the panel agreed that strong labor markets are contributing to higher prices and that interest rates are likely to continue rising to combat inflation.
Currie commented, “In general, they remained firm in their stance. They are determined to keep fighting inflation and see no compelling evidence of it slowing down.”
Meanwhile, in Canada, energy stocks saw an increase as the price of oil rose due to lower-than-expected U.S. crude inventories last week.
Gold experienced a significant drop on Wednesday after a period of decent performance. Currie attributed this decline to the remarks by central bankers regarding interest rates, stating, “This is unfavorable for gold. However, it indicates that there will likely be significant upward movements in other markets.”
The August gold contract decreased by US$1.60 to reach US$1,922.20 per ounce.
The Canadian dollar traded at 75.45 cents UScompared to 75.90 cents US on Tuesday.
The August crude contract increased by US$1.86 to reach US$69.56 per barrel, while the August natural gas contract decreased by 12 cents to reach US$2.67 per mmBTU.
The September copper contract fell by five cents to reach US$3.74 per pound.
— With files from The Associated Press
© 2023 The Canadian Press
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