Equities in Canada’s largest market promised big things Wednesday morning, only to see that promise evaporate, as investors initial buzz over lower interest rates dissipated.
The TSX Composite Index gained 6.43 points to close Wednesday at 29,388.20.
The Canadian dollar dropped 0.17 cents to 72.61 cents U.S.
The Bank of Canada reduced its benchmark interest rate by 25 basis points on Wednesday, a move observers had almost universally expected amid various signs of economic weakness.
Air Canada said its flight attendants had requested a cancellation of mediation after members voted against a wage agreement earlier this month.
Shares in “The Maple Leaf Airline” dipped 11 cents to $18.79.
Consumer stocks rose as Aritzia eased 12 cents to $86.45, and Dollarama added $1.68 to $189.02.
Conversely, technology shares were under pressure as heavyweight Celestica dropped $9.24, or 2.6%, to $340.67.
Meanwhile, Finance Minister Francois-Philippe Champagne said in a social media post the country's upcoming federal budget would be delayed to November 4 from a previously announced October delivery.
Prime Minister Mark Carney had said the 2025/26 budget deficit would be larger than that of last year, partly due to the impact from U.S. tariffs.
Elsewhere on the economic calendar, Statistics Canada reported foreign investors acquired $26.7 billion of Canadian securities in July, led by purchases of federal government debt instruments and equity securities.
Meanwhile, Canadian investors added $17.4 billion of foreign securities to their portfolio, including a record investment in foreign bonds.
ON BAYSTREET
The TSX Venture Exchange faded 1.14 points to 875.13.
The 12 subgroups were evenly divided, with health-care 0.6% stronger, followed by consumer discretionary stocks, riding 0.4% higher, and telecoms, up 0.3%.
The half-dozen laggards were weighed most by information technology, down 0.9%, while industrials and consumer staples each folded 0.2^.
ON WALLSTREET
The Dow Jones Industrial Average was higher and the S&P 500 was little changed in volatile trading Wednesday after the Federal Reserve lowered its benchmark rate as expected. Fed Chairman Jerome Powell tempered enthusiasm a bit by signaling the move was not the start of a long rate-lowering cycle.
The blue-chip index came off an all-time high, still gaining 260.42 points to 46,018.32.
The much-broader index retreated 6.91 points to 6,600.35.
The tech-heavy NASDAQ index came off its lows of the day, dropping 72.65 points to 22,261.33.
The S&P 500 is up 2.3% month to date, while the NASDAQ has jumped 4% on a surge in artificial intelligence-related stocks. The Dow is up 1% this month.
Shares of high-flying tech stocks led the losses following the Fed decision as investors took profits on the bull market
winners.
Nvidia, Oracle, Palantir and Broadcom were all lower. On the positive side, stocks that would benefit from lower rates were in the green, boosting the Dow and the broader market. Shares of Walmart, JPMorgan and American Express were higher.
The Federal Open Market Committee lowered its benchmark overnight lending rate by a quarter percentage point in an 11 to 1 vote, putting the overnight funds rate in a range between 4%-4.25%. The central bank also signaled two interest rate cuts will be implemented during the remainder of the year.
What’s more, the central bank gave a more hawkish outlook for rates in 2026, where officials are predicting only one more rate cut in the new year, slower than the current market pricing of two-to-three. To be sure, the Fed’s so-called dot plot shows a large variance of opinion for the next year.
Policymakers will also give more insight into their outlook for rates over the next year or so in the closely-watched “dot plot” grid that accompanies their quarterly Summary of Economic Projections.
Investors will also watch for any policy dissents from Fed policymakers after two such disagreements at the last meeting in July.
Traders have priced in a 96% chance that the Fed will cut rates by 25 basis points, or a quarter percentage point, and just 4% odds that the market will get a half-point reduction Wednesday
Prices for 10-year Treasury lost ground Wednesday, pushing yields up to 4.07% from Tuesday’s 4.03%. Treasury prices and yields move in opposite directions.
Oil prices fell 55 cents to $63.97 U.S. a barrel.
Gold prices blundered $31.20 to $3,694.40 U.S. an ounce.
