TSX Falls as Energy Stocks Drag

Canada's main stock index fell hard on Tuesday, as weakness in crude dragged energy shares lower, while caution prevailed ahead of the U.S. Federal Reserve's interest rate decision this week.

The TSX stumbled 223.06 points, or 1.1%, to kick off Tuesday at 20,392.04.

The Canadian dollar shrank 0.38 cents to 73.39 cents U.S.

Consumer discretionary bucked the trend, up 0.1%, led by a 2.2% gain in Restaurant Brands International after the company beat expectations for first-quarter revenue and profit, boosted by higher traffic and prices at Tim Hortons restaurants.

Among other major movers, Colliers International Group slumped 9.7% to the bottom of the TSX, after the investment management company missed first-quarter profit estimates.

Thomson Reuters posted higher sales and profit in the first quarter, and said it plans a deeper investment in artificial intelligence. Shares of the news and information company, however, fell 1.4%.

BlackBerry added 4.6% after the company said it would conduct a review of strategic alternatives, which could include the possible separation of its one or more businesses.

ON BAYSTREET

The TSX Venture Exchange faded 3.08 points to 605.57.

All but two of the 12 TSX subgroups reported losing ground, as energy paled 3.8%, real-estate lost 1.4%, and consumer discretionary withered 0.6%.

The two strong areas were in gold, picking up 1.7%, and materials, clearing breakeven 0.2%.

ON WALLSTREET

Stocks fell slightly Tuesday as investors prepared for the Federal Reserve’s May policy meeting to kick off.

The Dow Jones Industrials plunged 378.28 points, or 1.1%, to open at 33,673.42.

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The S&P 500 dipped 45.74 points, or 1.1%, to 4,122.13.

The NASDAQ Composite let go of 112.59 points to 12,100.01.

Both small and large banks saw their shares decline Tuesday. Regional banks PacWest and Western Alliance had trading paused after tumbling more than 20%. Meanwhile, JPMorgan Chase’s shares shed 1%, giving back some of its gains from the previous session. Other large banks including Goldman Sachs, Bank of America and Citigroup also dropped more than 2.5%.

The Fed’s two-day policy meeting, which kicked off Tuesday, is expected to conclude with the central bank announcing another 25 basis-point rate hike. Per the CME Group’s FedWatch tool, traders are pricing in 97% chance of a rate hike. Investors will be looking for clues on whether the Fed will keep rates steady after this meeting, or if it will further tighten monetary policy to fight inflation.

Investors were focused on the bank sector following the announcement that JPMorgan Chase won the weekend auction for troubled First Republic Bank.

Weighing on sentiment Tuesday was word from Treasury that the country may hit the debt ceiling sooner than expected. Treasury Secretary Janet Yellen warned that the U.S. may run out of measures to pay its debts as early as June 1, earlier than the late July deadline Goldman was estimating.

Wall Street will also watch for data on job openings, factory orders and light vehicle sales on the economic front. Investors will also keep an eye out for the April payrolls data on Friday.

Earnings season also continues this week, with Apple scheduled to announce its quarterly performance on Thursday.

Prices for the 10-year Treasury shot up, lowering yields to 3.45% from Monday’s 3.58%. Treasury prices and yields move in opposite directions.

Oil prices skidded $2.74 to $72.92 U.S. a barrel.

Gold prices regained $19.10 to $2,011.30 U.S. an ounce.