TSX falls more than 150 points amid weaker energy stocks, U.S. markets rise

Canadian and U.S. markets moved in opposite directions Thursday as commodity prices weighed on materials and energy stocks. 

Brianne Gardner, senior wealth manager of Velocity Investment Partners at Raymond James Ltd., said weakness in the TSX basic materials, energy and technology sectors outweighed some of the gains in the financial and industrials sectors. 

“Investors are becoming more comfortable with this improving geopolitical backdrop and prospects for higher global oil supply,” she said. 

The S&P/TSX composite index was down 155.85 points at 34,969.26.

In New York, the Dow Jones industrial average was up 72.15 points at 51,564.70. The S&P 500 index was up 80.48 points at 7,500.58, while the Nasdaq composite was up 496.28 points at 26,517.93.

Stocks rose on Wall Street and erased most of their losses from a day earlier to notch weekly gains. The decline on Wednesday was driven by anticipation that the U.S. Federal Reserve will likely raise interest rates this year in an effort to fight inflation.

On Thursday, U.S. stocks faced less pressure as bond yields eased and oil prices spent most of the day falling.

Technology stocks had some of the biggest gains and the most influence on the broader market’s rise. Intel surged 10.6% after U.S. President Donald Trump announced that the semiconductor giant will make chips for Apple in the U.S. Other big semiconductor companies gained ground. Nvidia rose 3% and Micron Technology jumped 8.7%.

On the losing end, SpaceX fell for the second straight day since its ballyhooed debut on the U.S. stock market last week. The Elon Musk-led rocket maker and AI company was down 3.6% following a 4.9% loss Wednesday.

Oil prices wavered after the United States and Iran signed an agreement to end their war and reopen the Strait of Hormuz to oil tanker traffic. Brent crude, the international standard, spent most of the day lower before settling 0.4% higher at US$79.85 per barrel.

The August crude oil contract was down 16 cents US at US$75.85 per barrel. 

Higher oil prices have been weighing on U.S. markets throughout the war. The current deal between the U.S. and Iran waives sanctions against Iran and allows it to sell its oil freely. It also opens up the Strait of Hormuz, where a fifth of the world’s oil supply is shipped.

Rising energy costs have been putting more pressure on already hot inflation.

Hotter inflation prompted the Fed to shift course from cutting its benchmark interest rate to likely raising rates by the end of the year. The Fed has been trying to balance its job of curbing inflation while supporting employment growth. 

Gardner said markets are digesting recent comments from the U.S. Fed that were viewed as somewhat hawkish. 

“That created a little bit of a modest risk-off tone globally,” she said. 

The yield on the 10-year Treasury fell to 4.45% from 4.49% late Wednesday.

The August gold contract was down US$135.50 at US$4,245.90 an ounce.

“Gold has quietly become one of the most important drivers for the Canadian markets, unlike the U.S., where technology has continued to dominate the U.S. stock market,” Gardner said. 

The Canadian dollar traded for 70.77 cents US compared with 71.26 cents US on Wednesday.    

— With files from The Associated Press