The Toronto Stock Exchange faced significant declines midday Wednesday, driven by steep losses in financial and resource stocks. The TSX Composite Index dropped 565.95 points, or 1.6%, to close at 35,083.56. The Canadian dollar remained relatively stable, settling at 70.13 cents U.S. Major financial institutions like Royal Bank of Canada and Toronto-Dominion Bank saw sharp declines, falling 1.8% and 2.8% respectively. Investors are anticipating at least one 25-basis-point interest rate hike by the Bank of Canada before the end of the year.
The TSX Venture Exchange also experienced a downturn, losing 13.87 points, or 1.6%, to settle at 876.25. Most sectors saw declines, with gold and materials each sliding 2.8%, and financials down 2%. Only three subgroups posted gains: health-care, up 1.1%, and consumer staples and telecoms, each rising 0.7%.
Across the border, Wall Street mirrored the downturn, with stocks falling as bond market pressures intensified. The Dow Jones Industrials plummeted 384.32 points to 51,136.96, while the S&P 500 dipped 25.4 points to 7,793.43. The NASDAQ Composite lost 124.5 points to 27,475.38, retreating from an all-time high. The benchmark 10-year Treasury note yield climbed to 5.356%, its highest level since April 2002, while the 30-year bond yield reached 5.725%, a peak not seen since May 2002.
Higher yields impacted key market areas, with bank stocks dropping due to concerns that elevated interest rates could curtail lending activity. Goldman Sachs and Citigroup each fell nearly 2%, while Bank of America, Wells Fargo, and JPMorgan shed around 1%. Technology stocks also faced pressure amid worries that higher borrowing costs could limit artificial intelligence investments. CrowdStrike shares dropped almost 4%, Palo Alto Networks sank more than 3%, and Meta Platforms lost over 2%. Oil prices declined by 40 cents to $89.04 U.S. per barrel, and gold prices fell $53.50 to $4,133.60 U.S. per ounce.