TORONTO — Canada's main stock index declined by more than 100 points Thursday amid broad-based weakness, while U.S. markets also moved lower, with the Nasdaq leading losses at 1.87 per cent.
The S&P/TSX composite index closed down 103.96 points at 19,775.83.
In New York, the Dow Jones industrial average was down 373.56 points at 34,099.42.The S&P 500 index was down 59.70 points at 4,376.31, while the Nasdaq composite was down 257.06 points at 13,463.97.
Chipmaker Nvidia came out with a “blowout” earnings report after the bell Wednesday, but it failed to drive the market upward as some might have expected, said Brian Madden, chief investment officer with First Avenue Investment Counsel.
Nvidia beat analyst projections, with quarterly revenue doubling from the same time last year and a profit more than nine times what it made a year ago.
Madden suspects that after the company blew investors out of the water last quarter, many bought the rumour and sold the news ahead of the second-quarter report.
There were other factors working against the equity market Thursday, as bond yields turned back from Wednesday’s reprieve and climbed again.
Markets have been “blowing off steam” in August, said Madden, with bonds in a bear market while equities take a pause.
“The market overall, technology in particular, has been in a corrective mode throughout the month of August after a pretty strong July and a really blockbuster first six months of the year,” he said. Generative artificial intelligence, which has fueled much of Nvidia’s meteoric rise, was the main theme of that rally.
Investors are awaiting a speech by U.S. Federal Reserve chairman Jerome Powell on Friday at the annual Jackson Hole symposium.
“I think a lot of people are a bit apprehensive about what might be said at Jackson Hole tomorrow,” said Madden.
Economic data continues to show some cooling in labour but still an overall very healthy jobs market, while services continue to be more resilient than goods, said Madden.
A pair of reports on the U.S. economy added to the mixed pile Thursday. One report showed that fewer U.S. workers applied for unemployment benefits last week, while another showed that orders for long-lasting manufactured goods were lower last month than expected.
In Canada, RBC and TD kicked off bank earnings with no major worries to their Canadian businesses, said Madden, though both saw some weakness in their U.S. businesses due to headwinds in that country’s regional banking sector post-crisis.
The Canadian dollar traded for 73.72 cents UScompared with 73.79 cents US on Wednesday.
The October crude contract was up 16 cents at US$79.05 per barreland the October natural gas contract was up four cents at US$2.64 per mmBTU.
The December gold contract was down one dollar at US$1,947.10 an ounce and the September copper contract was down four cents at US$3.77 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Aug. 24, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
Rosa Saba, The Canadian Press