TORONTO — Canada's main stock index posted a small loss Monday amid broad-based weakness, while U.S. markets were mixed as the tech-focused Nasdaq gained almost 1.6 per cent.
The S&P/TSX composite index closed down 33.52 points at 19,784.87.
In New York, the Dow Jones industrial average was down 36.97 points at 34,463.69. The S&P 500 index was up 30.06 points at 4,399.77, while the Nasdaq composite was up 206.81 points at 13,497.59.
Monday’s gains were all about tech, said Allan Small, senior investment adviser at iA Private Wealth.
Nvidia, the chip-making company that helped drive the tech rally earlier this year, saw several analyst upgrades that boosted its stock, said Small. Nvidia’s stock rose almost 8.5 per cent Monday.
The company is set to report results for the latest quarter on Wednesday after the bell.
Nvidia’s last report was “one of the best quarterly earnings reports I've ever seen from any company in any sector,” said Small.
“They just blew it out of the water.”
The bar is high for Nvidia ahead of Wednesday’s report, he said, and if it misses, that could reverberate across the entire tech sector.
“If that were to show signs of cracking, that could be a pretty big negative, in my opinion, for not only semiconductors but the tech sector as a whole. And we know how much the tech sector means to the overall market,” he said.
Bond yields continued to rise, with the 10-year Treasury yield touching its highest level since 2007, putting pressure on the stock market. Yields are rising on a growing sense that interest rates could remain higher for longer, said Small.
“I think a lot of this is on the back of what the Fed is doing,” he said, as well as on recent economic data coming in a little bit hotter than anticipated.
While a pause is likely at the U.S. Federal Reserve’s September meeting, the question is whether more hikes are still in the cards, he said.
“It’s all about inflation and the latest data.”
On Friday, Fed chairman Jerome Powell will speak at the central bank’s annual economic symposium in Jackson Hole. Though his comments are highly anticipated, Small doesn’t expect any surprises as Powell has to continue balancing keeping a hawkish tone without sending markets into a free-fall.
The Canadian dollar traded for 73.84 cents UScompared with 73.79 cents US on Friday.
The October crude contract was down 54 cents at US$80.12 per barrel and the September natural gas contract was up eight cents at US$2.63 per mmBTU.
The December gold contract was up US$6.50 at US$1,923 an ounceand the September copper contract was up a penny at US$3.72 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Aug. 21, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
Rosa Saba, The Canadian Press
