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Interest Rate Jitters Grab Stock Markets

Toronto stocks faltered on Monday hurt by rate-sensitive technology shares as U.S. Treasury yields edged up, while investors keenly await inflation data this week that could offer more insight into the Bank of Canada's outlook for interest rates.

The TSX Composite Index dumped 129.51 points to conclude Monday at 20,492.83, off its lows of the afternoon.

The Canadian dollar gained 0.18 cents at 74.13 cents U.S.

Health-care stocks took the most punishment, with Tilray being flattened 58 cents, or 14.5%, to $3.43, while Bausch Health Companies dumped 22 cents, or 1.9%, to $11.30.

Tech stocks were also bruised, with Shopify slumped $4.59, or 5.5%, to $80.24, while Alithya handed over 10 cents, or 3.9%, to $2.49.

In resource stocks, First Majestic Silver falling 30 cents, or 3.8%, to $7.58, while MAG Silver was off 62 cents, or 3.8%, to $7.58.

Gold moved slightly higher, with Seabridge Gold surging 91 cents, or 6%, to $16.00, while Torex Gold acquired 20 cents, or 1.4%, to $14.69.

In communications, Quebecor heightened 15 cents to $29.93, while Cogeco Communications grabbed 25 cents to $62.84.

On the economic schedule, Statistics Canada said its Industrial Product Price Index rose 1.3% month over month in August and fell 0.5% year over year. The agency’s Raw Materials Price Index increased 3.0% on a monthly basis in August and posted a 4.3% year-over-year decline.

Housing starts in Canada fell by 1% over a month earlier to 252,787 units in August 2023, above market expectations of 247,100 units, according to the Canada Mortgage and Housing Corporation.

ON BAYSTREET

The TSX Venture Exchange squeezed ahead 0.31 points to 591.09.

All but two of the 12 TSX subgroups remained negative by day’s end, weighed most by health-care, down 3.9%, while information technology pointed downward 2%, and materials lost 0.7%.

Only gold and communications cleared breakeven, and less than 0.1% each at that.

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ON WALLSTREET

Stocks closed near the flat line Monday afternoon as investors geared up for the Federal Reserve meeting scheduled for later in the week.

The Dow Jones Industrials fought its way into the plus column 6.06 points to finish at 34,624.30.

The S&P 500 index gained 3.21 points to 4,453.53.

The NASDAQ index inched up 1.9 points to 13,710.24.

Apple climbed around 1.7%. Goldman Sachs and Morgan Stanley both gave optimistic outlooks for new iPhone demand.

Meanwhile, Ford slid more than 2% as the United Auto Workers strike continued. Stellantis and General Motors, the other automakers facing off with the union, shed more than 1%.

Traders are assigning a 99% chance that the Fed stays put when it releases its rate decision on Wednesday and just a 31% probability of a hike in November, according to the CME Group’s FedWatch tool, which gauges pricing in the fed funds futures market.

Prices for the 10-year Treasury regained lost strength, lowering yields to 4.31% from Friday’s 4.33%. Treasury prices and yields move in opposite directions.

Oil prices strengthened $1.18 to $91.95 U.S. a barrel.

Gold prices surged $8.50 to $1,954.70 U.S. an ounce.