TORONTO — Canada's main stock index closed down almost 250 points Tuesday with broad-based losses led by the telecom, utilities and base metal sectors, while U.S. stock markets also tumbled.
The S&P/TSX composite index closed down 244.46 points at 19,556.15.
In New York, the Dow Jones industrial average was down 388.00 points at 33,618.88. The S&P 500 index was down 63.91 points at 4,273.53, while the Nasdaq composite was down 207.71 points at 13,063.61.
September has so far been a rocky month, said Allan Small, senior investment adviser at iA Private Wealth. While there wasn’t one specific news item causing markets to slip Tuesday, there’s a lot for investors to worry about, he said.
“I think the short sellers are out in full force,” he said.
With stubborn inflation amid a slowing economy, soaring bond yields, higher energy costs and a second looming U.S. government shutdown, “there are so many reasons ... to be negative,” said Small.
A group of reports in the U.S. painted a mixed picture of the country’s economy. One report showed consumer confidence was weaker this month than economists expected, while another said sales of new homes across the country slowed by more than expected last month. But another report showed manufacturing in certain areas steadying.
But Small thinks the market could still turn around heading into the last months of the year, which often happens on a seasonal basis.
“Yes, it's been a tough month. But I just feel like I've seen this story before,” he said.
The U.S. Federal Reserve has indicated it could raise rates one more time this year, while the Bank of Canada has also left the door open. Treasury yields are near their highest levels in more than a decade as investors digest the idea that interest rates will likely stay higher for a longer time.
Higher interest rates are generally not good for equity markets, said Small.
“Until that changes, until the Fed and the Bank of Canada and all the central banks say, ‘Okay, we're done,’ this is going to be a difficult market.”
The Canadian dollar traded for 74.02 cents US compared with 74.23 cents US on Monday.
The November crude contract was up 71 cents at US$90.39 per barrel and the November natural gas contract was down six cents at US$2.85 per mmBTU.
The December gold contract was down US$16.80 at US$1,919.80 an ounceand the December copper contract was down two cents at US$3.65 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Sept. 26, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Rosa Saba, The Canadian Press