TSX hits 3-week low as hawkish Fed stance hurts commodity stocks
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The materials sector, which includes companies involved in mining precious and base metals as well as fertilizer companies, lost 1.5%, hitting its lowest level in four weeks. This decline was influenced by lower copper and gold prices following the Federal Reserve’s tightening stance.
The heavyweight energy sector saw a decline of 0.3%, reflecting the impact of falling oil prices.
Rate-sensitive technology stocks fell by 1.3%.
The U.S. Federal Reserve maintained interest rates but signaled a more hawkish stance, projecting potential rate hikes, which contributed to the decline in commodity prices.
The Bank of Canada has also left the possibility of further tightening open, particularly after higher-than-expected domestic inflation in August.
In contrast, the Bank of England stopped its series of interest rate increases due to a slowing British economy and falling inflation. However, the central bank’s governor emphasized that its work was not yet complete.
Geopolitical tensions between India and Canada escalated as India suspended visa services for Canadian citizens. This followed Canada’s statement suggesting a potential link between Indian government agents and the murder of a separatist Sikh leader.
