On Wednesday, Canada’s main stock index fell after the country’s central bank unexpectedly increased interest rates by a full percentage point and raised its inflation forecast, while hot U.S. inflation data strengthened bets for aggressive Federal Reserve tightening of monetary policy.
To 76.77 cents U.S., the Canadian dollar increased by 0.05 cents.
Barrick Gold increased by 29 cents, or 1.4 percent, to $21.67 as gold stocks rose.
Loblaw Companies experienced a $2.79, or 2.4 percent, drop to $120.16 in consumer staples.
Industrials, however, fell as Air Canada was grounded, losing 39 cents (2.4%) to $16.36.
The Bank of Canada raised its overnight rate target today from 2.5% to 2.5%, with the bank rate remaining at 2.75 percent and the deposit rate remaining at 21%.
BAY STREET, ON
To 589.91, the TSX Venture Exchange lost 2.79 points.
All but three of the 12 TSX subgroups experienced declines, with health care down 2%, industrials down 1.6 %, and information technology down 1.3 %.
The three gainers were found to be materials, up 0.04 percent, energy, up 0.2 percent, and gold, up 0.4 percent.
WALL STREET
Following the release of hotter-than-expected June inflation data, stocks fell on Wednesday, fueling growing concerns that the Federal Reserve will step up its efforts to tame rising prices.
The Dow Jones Industrials recovered some of its morning lows but ended the day down 206.9 points at 30,774.43.
To reach 3,799.36, the S&P 500 dropped 19.44 points.
To 11,227.53, the NASDAQ Composite fell 37.31 points.
On Wednesday, all significant S&P 500 sectors fell, with the exception of consumer discretionary, which benefited from gains in technology. Boeing, Dow, and Walgreens all saw their shares fall by more than 1% each, sending the Dow into the red.
Despite mounting growth concerns, battered tech shares Amazon and Tesla staged a comeback on Wednesday, rising more than 1% each.
The action briefly put the tech-heavy NASDAQ in the black. Twitter filed a lawsuit against Elon Musk, which caused its stock to increase by 6.4 percent.
Investors continued to keep an eye on second-quarter earnings in addition to the inflation report in order to gain insight into the state of American companies. Shares of Delta Air Lines fell 6.3% after the airline reported conflicting results.
American Airlines lost 5% and United dropped 2% as a result of the news. Norwegian, Royal Caribbean, and Carnival all experienced declines of about 2%.
Even higher than May’s 8.6 percent reading, which was the highest increase since 1981, the consumer price index increased 9.1 percent year over year in June. An 8.8 percent print was what economists surveyed by Dow Jones’ had predicted.
Core CPI, which excludes prices for food and energy, was 5.9 percent, exceeding the estimate of 5.7 percent.
Treasury prices increased, bringing down yields from 2.97 percent on Tuesday to 2.95 percent. Treasury yields and prices move in the inverse direction.
The price of oil dropped 29 cents to $95.55 US per barrel.
The price of gold increased $12.30 to $1,737.10 USD per ounce.
