TORONTO 鈥� sa国际传媒's main stock index lost almost 200 points Wednesday amid a broad-based decline,while U.S. markets also posted losses, as investors fretted over stubbornly high inflation.聽
The theme Wednesday was the persistent risk of sticky inflation on both sides of the border, said Ryan Crowther, vice-president and portfolio manager at Franklin Templeton sa国际传媒.
The Bank of sa国际传媒 left its key interest rate unchanged as expected, but highlighted that it鈥檚 still open to hiking rates if the economic data warrants such a move.
鈥淚 think they鈥檙e clearly keeping the door open for a further increase if it鈥檚 needed,鈥� said Crowther.聽
Gas prices helped inflation tick higher in July, and will likely keep the Consumer Price Index elevated in the short term, the central bank said.
But higher rates are rippling through the economy, Crowther said, and the bank鈥檚 press release highlighted a 鈥渟harp slowdown鈥� in the Canadian economy in the second quarter.聽
鈥淗igher rates (are) clearly having an increased impact on economic conditions in sa国际传媒, taking the toll on borrowing, including the consumer鈥檚 ability to take on new debt and service existing debt.鈥澛�
The S&P/TSX composite index closed down 186.80 points at 20,226.96.
In New York, the Dow Jones industrial average was down 198.78 points at 34,443.19. The S&P 500 index was down 31.35 points at 4,465.48, while the Nasdaq composite was down 148.48 points at 13,872.47.
Inflationary risks weighed heavily on tech stocks in particular, with names such as Apple and Nvidia leading the losses. Apple鈥檚 stock was down 3.6 per cent, while Nvidia was down 3.1 per cent.
A new survey from The Institute for Supply Management reported that the services sector in the U.S. remained healthy, and grew faster than economists expected in August, indicating continued strength in consumer spending when central banks are looking for weakness.
鈥淭his morning, the North American equity markets were focused on that risk of continued inflation pressure,鈥� said Crowther, with investors concerned the U.S. Federal Reserve could hike rates again later in 2023. 聽
Meanwhile, the price of oil continued to climb, reaching nine-month highs, noted Crowther. That鈥檚 not helping with inflation concerns, he said.聽
鈥淥il鈥檚 had a strong run since late June this year, and prices have remained strong this week with OPEC plus extending their supply cut through the end of 2023.鈥澛�
The Canadian dollar traded for 73.24 cents UScompared with 73.38 cents US on Tuesday as the Bank of sa国际传媒 kept its key interest rate on hold.
The October crude contract was up 85 cents at US$87.54 per barrel and the October natural gas contract was down seven cents at US$2.51 per mmBTU.
The December gold contract was down US$8.40 at US$1,944.20 an ounceand the December copper contract was down six cents at US$3.79 a pound.
鈥� With files from The Associated Press
This report by The Canadian Press was first published Sept. 6, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
Rosa Saba, The Canadian Press
