TSX Slides in Response to Higher Bank Rate

Canadian stocks lurched lower on Wednesday after the country's central bank's surprise decision to raise its benchmark interest rates, while a boost from energy shares helped keep the main stock index afloat.

The TSX had faded 13.08 points as morning became afternoon Wednesday to 20,042.52.

The Canadian dollar gained 0.3 cents to 74.91 cents U.S.

North West Company dropped $3.40, or 8.9%, to $35.00, after the food retailer reported quarterly profit below market expectations, pulling consumer staples to the bottom of the sector indexes.

On the economic calendar, Statistics Canada reported this country’s merchandise exports increased 2.5% in April, while imports edged down 0.2%. As a result, Canada's merchandise trade surplus with the world widened from $231 million in March to $1.9 billion in April.

The Bank of Canada today increased its target for the overnight rate to 4.75%, its highest in 22 years, with the Bank Rate at 5% and the deposit rate at 4.75%. The central bank is also continuing its policy of quantitative tightening.

ON BAYSTREET

The TSX Venture Exchange skidded 1.17 points to 611.41.

Seven of the 12 TSX subgroups moved lower by noon, with information technology down 1.1%, while consumer staples and consumer discretionary stocks each dived 0.8%.

The five gainers were led by real-estate, improving 1.4%, while industrials took on 0.5%, and real-estate gained 0.3%.

ON WALLSTREET

Stocks were little-changed Wednesday, with the S&P 500 trading around highest closing levels since August 2022.

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The Dow Jones Industrials just cleared breakeven 8.57 points to pause for noon hour at 33,581.85.

The much-broader S&P 500 backpedaled 11.25 points to 4,272.45.

The tech-heavy NASDAQ index dropped 88.96 points to 13,187.45.

The tail-end of earnings season pressed on with results from Dave & Buster’s and Stitch Fix. Dave & Buster’s gained 21%, while Stitch Fix added more than 32%.

Stocks have been boosted recently as the promise of artificial intelligence lifts tech stocks. Over the past three months, the S&P 500 is up more than 7%.

The U.S. trade deficit continued to increase in April, but came in slightly below economists’ expectations. The deficit could translate into lower GDP growth for the second quarter.

Prices for the 10-year Treasury sagged, raising yields to 3.78% from Tuesday’s 3.68%. Treasury prices and yields move in opposite directions.

Oil prices recovered $1.28 to $73.02 U.S. a barrel.

Gold prices sagged $15.80 to $1,965.70 U.S. an ounce.