TORONTO 鈥� Losses in base metal and technology stocks helped lead a broad-based decline Thursday as sa国际传媒's main stock index fell more than two per cent.
U.S. stock markets also tumbled the day after the U.S. Federal Reserve's latest rate decision.
The Fed held its key interest rate steady, but indicated another hike could be coming in 2023, and halved its projected cuts in 2024. It credited an economy that鈥檚 proven more resilient than expected and predicted inflation wouldn鈥檛 reach the central bank鈥檚 target until 2026.
Chair Jerome Powell said a soft landing for the economy appears within reach, but the central bank needs more evidence that interest rates have done what they needed to do, especially as the labour market remains 鈥渧ery strong.鈥澛�
鈥淲e鈥檙e making progress on inflation. Growth is strong,鈥� Powell said Wednesday.聽
The S&P/TSX composite index closed down 423.07 points at 19,791.62.
In New York, the Dow Jones industrial average was down 370.46 points at 34,070.42.The S&P 500 index was down 72.20 points at 4,330.00,while the Nasdaq composite was down 245.14 points at 13,223.99.
Markets are re-pricing their expectations for interest rates after the Fed鈥檚 hawkish comments and projections Wednesday, said Mike Archibald, vice-president and portfolio manager with AGF Investments Inc.
Thursday saw fresh evidence of the strength Powell cited in his remarks, said Archibald.
鈥�(We) got some data this morning that continues to suggest that the U.S. economy is doing pretty good. And so rates remain higher for longer,鈥� he said.聽
Fewer workers applied for unemployment benefits last week than expected, the lowest number since January. The job market has been persistently strong despite the central bank鈥檚 tightening.
However, reports on manufacturing and home sales showed that those two areas are feeling the bite of higher interest rates.
Bond yields rose significantly, said Archibald, putting pressure on equities. The tech sector, as usual, led the market losses as tech stocks tend to be more sensitive to higher interest rates, with the Nasdaq losing 1.82 per cent.
He expects the choppy period for markets to continue ahead of the next earnings season.
鈥淩isk assets are going to remain volatile, I think, as long as interest rates continue to remain at an elevated level.鈥�
Russia temporarily banned exports of diesel and gasoline Thursday, which may put even more upward pressure on energy prices, said Archibald. The price of oil has been steadily marching upward for months, recently cresting US$90 per barrel.
The Canadian dollar traded for 74.15 cents US compared with 74.50 cents US on Wednesday.
The November crude contract was down three cents at US$89.63 per barrel and the November natural gas contract was down eight cents at US$2.84 per mmBTU.
The December gold contract was down US$27.50 at US$1,939.60 an ounceand the December copper contract was down eight cents at US$3.70 a pound.
鈥� With files from The Associated Press
This report by The Canadian Press was first published Sept. 21, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
Rosa Saba, The Canadian Press
