Toronto stocks down almost 100 points, U.S. mixed amid rate angst

TORONTO — Weakness in several sectors, including financials and utilities, led Canada’s main stock index down almost 100 points on Tuesday, while U.S. markets were mixed after a choppy day of trading.

U.S. equity markets saw a bit of a bounceback from Monday’s fall, said Jules Boudreau, senior economist at Mackenzie Investments. But the overall mood was still negative, he said, in a continuation of recent trends.

“Markets have been a little bit stressed out over the past weeks because valuations had been getting very stretched,” said Boudreau.

“So it was to be expected that when it started to weaken at the top, we would get a few days of negative price action.”

In New York, the Dow Jones industrial average was up 63.86 points at 37798.97. The S&P 500 index was down 10.41 points at 5051.41,while the Nasdaq composite was down 19.77 points at 15865.25.

The S&P/TSX composite index closed down 97.33 points at 21642.87.

Recent strong economic data reports have made it increasingly clear that the U.S. Federal Reserve won’t cut interest rates as soon as many investors would like.

On Tuesday, Fed chairman Jerome Powell said the central bank is waiting to cut because it needs more confidence that inflation is sustainably heading toward its target.

“The recent data have clearly not given us greater confidence and instead indicate that it’s likely to take longer than expected to achieve that confidence,” he said.

Powell’s comments were nothing new, said Boudreau, but still sent “tremors” through the market. Treasury yields climbed immediately after Powell’s comments.

Traders are betting on just one or two interest rate cuts from the Fed in 2024, significantly down from the expectations for six that started off the year.

In Canada, meanwhile, the latest inflation data helped strengthen the case for the central bank to start cutting in June, said Boudreau.

Inflation in March ticked higher to 2.9 per cent as gas prices rose, but core inflation continued to cool.

“The inflation report we got today is in the same vein as the previous two, so a very quick declaration,” said Boudreau. Core inflation is “clearly going in the right direction,” he added.

“I think it’s only a matter of time before they cut rates.”

The Canadian dollar traded for 72.35 cents US compared with

72.65 cents US on Monday.

The May crude oil contract was down five cents at $85.36 US per barrel and the May natural gas contract was up four cents at $1.73 US per mmBTU.

The June gold contract was up $24.80 US at $2,407.80 US an ounce and the May copper contract was down eight cents at $4.30 US a pound.

CAE signs deal to help train air traffic controllers

MONTREAL — Flight simulator maker CAE Inc. says it has signed an agreement with Nav Canada to help train flight service specialists and air traffic controllers, beginning this fall.

CAE instructors will use Nav Canada’s training curriculum and courseware as it conducts initial training at its new Air Traffic Services Training Centre on CAE’s campus in Montreal.