Canada's main stock index fell hard on Tuesday, dragged down by losses in materials stocks, as a dour mood on Wall Street overshadowed optimism from domestic data showing easing inflationary pressures.
The TSX Composite erased Monday’s gains and then some, retreating 237.14 points, or 1.2%, to head into noon hour EDT Tuesday at 19,325.24.
The Canadian dollar doffed 0.54 cents to 74.97 cents.
Gold stocks took the brunt of investors’ wrath, most notably, B2Gold, down 22 cents, or 4.9%, to $4.26, while New Gold faded five cents, or 4.1%, to $1.17.
In real-estate, Dream Industrial REIT handed back 45 cents, or 3.8%, to $11.48, while Allied Properties REIT fell $1.14, or 3.7%, to $29.50.
In materials, Canfor docked $1.12, or 4.8%, to $22.19, while Hudbay Minerals lost 24 cents, or 4.2%, to $5.51.
On the economic slate, Statistics Canada said its consumer price index rose 7.0% on a year-over-year basis in August, down from a 7.6% gain in July.
On a seasonally adjusted monthly basis, the CPI rose 0.1% in August.
Inflation numbers could influence traders' expectations around interest rate hikes by the Bank of Canada (BoC) ahead of a policy meeting next week.
Money market traders have fully priced in a 50-basis-point rate hike by the BoC. The central bank has already raised rates by 300 basis points in just six months to 3.25%, a 14-year high.
The TSX Venture Exchange cratered 7.96 points, or 1.3%, to 617.96.
All 12 TSX subgroups were negative by noon Friday, with gold staggering 2.4%, real-estate stepping back 2.3%, materials off 1.9%.
Stocks slid on Tuesday as the Federal Reserve kicked off its two-day policy meeting and Wall Street looked ahead to another large rate hike due out Wednesday.
The Dow Jones Industrials stumbled 328.72 points, or 1.1%, to break for lunch Tuesday at 30,690.96.
The S&P 500 retreated 38.01 points, or 1%, to 3,861.88.
The NASDAQ Composite let go of 55.54 points to 11,479.48.
Meanwhile, Ford shares slumped 9% after it announced that supply chain issues would cost the automaker an extra $1 billion in the third quarter.
The Federal Open Markets Committee begins its September meeting on Tuesday, where central bankers are expected to announce a 0.75 percentage point rate hike on Wednesday.
Stocks have tumbled in recent weeks as comments from Fed Chair Jerome Powell and an unexpectedly hot August consumer price index report caused traders to prepare for even higher rates until inflation cools.
Housing market data released Tuesday showed an unexpected jump in starts for August, although building permits saw the biggest decline since April 2020.
Investors are focused on the Fed’s latest policy meeting slated to begin Tuesday. The central bank is expected to raise interest rates by another three-quarters of a point, though investors are also watching for guidance about corporate earnings before the next reporting season begins in October.
Treasury prices lost sharply, raising yields to 3.59% from Friday’s 3.49%. Treasury prices and yields move in opposite direction.
Oil prices slumped $1.48 to $84.25 U.S. a barrel.
Gold prices lost $3.40 to $1,674.80 U.S. an ounce.
Dow Sinks 300+ Eve of Fed Policy Meeting