Canada’s main stock index declined on Monday, with financials and mining stocks leading the downturn. The S&P/TSX Composite Index dropped 338.59 points, or 0.94 per cent, to 35,837.96 by 11 a.m. ET. The materials sector, including metal miners, fell 1.1 per cent due to weaker gold and copper prices, while financials, the most heavily weighted sector, slipped 0.7 per cent.
Investors reacted to softer-than-expected domestic inflation data for September, ahead of the Bank of Canada’s interest rate decision next week. Canada’s consumer price index (CPI) rose 0.1 per cent from August and 3.1 per cent year-over-year, driven by higher gasoline and diesel prices. Analysts had expected a 3.2-per-cent annual increase. The yield on Canada’s benchmark 10-year bond rose over 2 basis points to 3.90 per cent following the data.
Traders now price in a 68-per-cent chance of a Bank of Canada interest rate hike next week, down from 74 per cent before the data. Michael Dehal, senior portfolio manager at Dehal Investment Partners, noted that multiple hikes in 2027 are likely given global economic trends and actions by other central banks. The rate-sensitive real estate sector fell 0.9 per cent, while tech stocks rose 0.5 per cent, tracking gains in the Nasdaq Composite index.
In the U.S., AI-linked stocks rebounded from last week’s losses, with the Nasdaq composite climbing 0.9 per cent. CoreWeave, a company borrowing to buy AI chips, rose 0.6 per cent after a 25.2 per cent drop last week. Nvidia added 0.6 per cent, lifting the S&P 500 by 0.4 per cent. SpaceX, which controls the xAI business, rose 1.6 per cent to US$148.38, with its founder Elon Musk pledging to give one share to every kid in America next year.