Canada's main stock index was subdued on Tuesday as losses in energy shares offset materials stocks' gains, while investors weighed the implications of a potential U.S. government shutdown that could disrupt critical economic data releases.
The TSX declined 118.03 points by noon EDT to 29,853.88.
The Canadian dollar weakened 0.08 cents at 71.77 cents.
In corporate developments, Imperial Oil said on Monday it would cut its workforce by about 20% by the end of 2027, part of a major restructuring that would eventually shutter most of its presence in Calgary.
Imperial Oil shares demurred $2.64, or 2.1%, to $125.60.
Canadians are pausing coast to coast Tuesday to observe the Day of Truth and Reconciliation with their indigenous population.
ON BAYSTREET
The TSX Venture Exchange retreated 3.18 points to 939.66.
Eight of the 12 subgroups had gone lower by noon, weighed by health-care, falling 2.5%, while energy and telecoms each surrendered 1%.
The four gainers were led by utilities and industrials, each up 0.1%, and gold, inching up 0.03%.
ON WALLSTREET
The S&P 500 fell on Tuesday as a potential U.S. government shutdown loomed. Wall Street was also headed for an unusually strong September.
The Dow Jones Industrial Index sagged 86.91 points at 46,229.16.
The much-broader index dipped 8.5 points to 6,652.71
The tech-heavy NASDAQ retreated 43.91 points to 22,457.46
Although shutdowns aren’t usually market-moving events, this time could be different as investors are already wary about a slowing labour market, the risk of stagflation and elevated stock valuations.
A shutdown could also prompt rating agencies to rethink the condition of U.S. credit, which was downgraded in May by Moody’s.
House Speaker Mike Johnson, said on Tuesday that he’s “skeptical” that a shutdown can be averted by the midnight deadline, saying that the outcome is in the hands of Senate Minority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries, said about Republicans that “if the government shuts down, it’s their decision to do it.”
The Labor Department also announced Monday that the September non-farm payrolls report scheduled to release Friday will not come out if the U.S. government suspends operations.
The report is one of several upcoming key data releases that will provide crucial information about the direction of the economy ahead of the Federal Reserve’s upcoming October policy meeting.
Exacerbating concerns over the shutdown was President Donald Trump’s threat over the weekend that a shutdown could result in mass firings of federal workers.
Software stocks retreated Tuesday, with Paychex pulling back 4% following its quarterly results and Salesforce moving 2% lower. Nvidia was a bright spot during the session, rising in sympathy with CoreWeave.
The latter, which is backed by Nvidia, announced a $14.2-billion artificial intelligence cloud infrastructure deal with Meta Platforms.
Even with Tuesday’s profit-taking, major U.S. stock indexes are on track for solid monthly gains as September wraps up.
The S&P 500, which has averaged a 4.2% drop for the month over the last five years, has increased 2% this month, and the Dow has gained 1%. The NASDAQ has outperformed with a 5% gain in September.
Tuesday will also bring the end of the third quarter. The broad market S&P 500 is up 7% quarter to date, while the tech-heavy NASDAQ is set to notch a 10% quarterly gain. The blue-chip Dow is up 4% since the end of June, its fifth straight quarterly advance.
Prices for the 10-year Treasury gained a few inches of ground, lowering yields to 4.14% from Monday’s 4.15%. Treasury prices and yields move in opposite directions.
Oil prices shed 59 cents to $62.86 U.S. a barrel.
Gold prices recovered $15.50 to $3,870.70 U.S. an ounce.
