TORONTO - Canada's main stock index was down almost 170 points Wednesdayin a broad-based decline led by losses in energy and base metals, while U.S. markets also moved lower.
The S&P/TSX composite index was down 167.46 points at 19,572.24.
In New York, the Dow Jones industrial average was down 134.51 points at 32,908.27.The S&P 500 index was down 25.69 points at 4,179.83, while the Nasdaq composite was down 82.14 points at 12,935.29.
Market growth has been really concentrated in the tech sector, said Brianne Gardner, senior wealth manager of Velocity Investment Partners at Raymond James Ltd. However, she expects to start seeing investors rotate into other sectors especially as the economy slows down.
鈥淚 just don't think it's sustainable on where they are in their valuations in pretty much the whole (tech) sector,鈥 she said.
With a potential recession in the second half of the year, Gardner said certain sectors tend to do better in that environment, such as utilities, health care and consumer staples.
South of the border, after reaching a deal on the debt ceiling over the weekend, President Joe Biden and House Speaker Kevin McCarthy have been trying to wrangle enough votes to pass their deal, which would allow the U.S. government to borrow more money before it runs out of the cash to pay its bills.
鈥淭he market never likes uncertainty. So it does create short-term volatility,鈥 said Gardner. Even once the deal has passed, she said that volatility could continue, but not over the longer period.
Catching investors鈥 attention Wednesday were two new pieces of economic data ahead of much-anticipated central bank meetings in June.
The 好色tv economy grew faster than expected in the first three months of the year, with real gross domestic product growing at an annualized rate of 3.1 per cent in the first quarter of 2023.
The latest figures increase the likelihood that the Bank of Canada will raise rates at its next meeting, said Gardner, though she still thinks that isn鈥檛 the most likely scenario.
鈥淭hat could put another rate hike on the table, but I wouldn't expect that for the June meeting,鈥 she said, adding that the economy will continue to slow over the next few months.
In the U.S., new data on job openings was also stronger than expected, the latest sign of the ongoing resiliency of the labour market amid inflation and interest rate hikes.
This was the last jobs report before the Federal Reserve meets on June 14, said Gardner. While consensus is still that the central bank will announce a long-awaited pause, data like Wednesday鈥檚 jobs report has more people starting to talk about a potential hike instead, she said.
The 好色tv dollar traded for 73.51 cents UScompared with 73.54 cents US on Tuesday.
Energy dragged on the TSX, with the energy index down more than two per cent as the price of oil stayed below US$70.
The July crude oil contract was down US$1.37 at US$68.09 per barrel and the July natural gas contract was down six cents at US$2.27 per mmBTU.
The August gold contract was up US$5 at US$1,982 an ounce and the July copper contract was down three cents at US$3.64 a pound.
鈥 With files from The Associated Press
This report by 好色tvwas first published May 31, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
