TORONTO — Losses in the energy sector led Canada's main stock index lower on Tuesday, while U.S. stock markets were also down.
Markets were essentially flat Tuesday after a positive start to the week the day before led by strength in tech stocks, said Allan Small, senior investment adviser at iA Private Wealth.
“Tech just took a big hit last week,” said Small, but Monday brought “a bit of a rebound.”
Investors on Tuesday were anticipating financial results coming after the bell from Alphabet and Tesla, he said, kicking off earnings from the major U.S. tech companies that have led this year’s rally.
The S&P/TSX composite index closed down 58.90 points at 22,813.75.
In New York, the Dow Jones industrial average was down 57.35 points at 40,358.09. The S&P 500 index was down 8.67 points at 5,555.74, while the Nasdaq composite was down 10.22 points at 17,997.35.
Later in the week, investors will get fresh economic data in the U.S., in particular GDP and the personal consumption expenditures index, key reports in the U.S. Federal Reserve’s decision-making around interest rates.
Earnings so far in the U.S. have been pretty good, said Small, though he noted there’s a lot at stake, particularly for the major tech names that have been driving Wall St. to new records.
“Coming into this earnings season ... the bar has been set pretty high,” he said, adding that investors will be looking for surprises to the upside.
“I think if you just come in as expected, you might see your stock sell off.”
Despite some signs that market strength is broadening somewhat, Small said he thinks the tech sector will continue to carry the market.
“It probably will be all about tech for many quarters to come,” he said.
“I think you’re going to need to see technology do well in the coming quarters, maybe even the coming years, for the market to do well.”
North of the border, the Bank of Canada is expected to announce its second interest-rate cut on Wednesday, said Small. After that, however, the central bank will likely hit pause, he said.
The Canadian dollar traded for 72.63 cents US compared with 72.70 cents US on Monday.
The September crude oil contract was down US$1.44 at US$76.96 per barrel and the September natural gas contract was down six cents at US$2.22 per mmBTU.
The August gold contract was up US$12.60 at US$2,407.30 an ounce and the September copper contract was down four cents at US$4.16 a pound.
This report by The Canadian Press was first published July 23, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Rosa Saba, The Canadian Press
