Canada’s main stock index closed marginally lower on Wednesday, after a global equity sell-off was largely cushioned by energy shares, recovery in mining stocks and minutes of the U.S. Federal Reserve’s January meeting.
The S&P/TSX Composite index lost 0.09%, or close to 22.68 points, to end at 25,626.16.
U.S. President Donald Trump on Tuesday announced tariffs on automotive imports “in the neighborhood of 25%” and said that more details will be revealed on April 2. Duties will be slapped on pharmaceutical and semiconductor imports, he added.
Asian and European markets closed sharply lower on Wednesday, with the pan-European STOXX 600 index
falling 0.9%, its biggest single-day drop this year. U.S. shares closed higher in a rebound after the Federal Reserve released the minutes of its meeting, with the S&P 500 posting its second straight all-time closing high.
Fed policymakers expressed concern about U.S. economic growth due to Trump’s policies, the minutes showed.
“The big picture here is that the markets continue to exhibit a surprising degree of resilience to all the headline risk,” said Elvis Picardo, portfolio manager at Luft Financial, iA Private Wealth.
Investors in this bull market do not want to miss any buying opportunity, he said.
Some analysts said the Fed’s concerns on growth hint at a potential interest rate cut, boosting investor optimism.
In Canada, the financial sector, with a weight of nearly one-third of the composite index, lost 0.27%. Royal Bank of Canada, the biggest company by market capitalization, fell 0.02%.
The sell-off was largely softened by energy stocks , which rose 0.87% as oil prices held near a one-week high of $76 per barrel on worries about supply disruptions in Russia and the U.S.
Mining stocks also helped to contain the slide in the main index, led by higher gold prices and an over 2.5% jump in Barrick Gold shares.
Reuters reported that the miner has signed a new agreement with the Mali government to end an almost two-year-old dispute over its mining assets.
U.S. stocks ended modestly higher on Wednesday and the S&P 500 notched its second straight all-time closing high as investors scrutinized the minutes from the Federal Reserve’s January policy meeting and digested U.S. President Donald Trump’s tariff plans.
All three major U.S. equity indexes made gains on the day.
At the Fed’s January policy meeting, the U.S. central bank left its key interest rate unchanged. The minutes show policymakers expressed concern about stubborn inflation and the potential effect of Trump’s policy proposals, particularly tariffs, on their efforts to bring price growth down to their target.
“There was some discussion (in the minutes) that there may be some economic slowing ahead,” said Paul Nolte, senior wealth adviser and market strategist at Murphy & Sylvest in Elmhurst, Illinois. “Maybe that’s giving investors some thought that the Fed could cut rates. It’s still on the table.”
“That said, (the Fed’s) not willing to do anything until they get a little bit more clarity as to what the tariffs look like,” Nolte added. “So from that perspective (it’s) a wait and see.”
Trump announced on Tuesday he would impose tariffs “in the neighborhood of 25%” on autos, semiconductors and pharmaceuticals, the latest in a series of measures that have raised concerns over the consequences of a global trade war.
“I think people are starting to see it as a bargaining chip or bluster, more bark than bite,” Nolte said.
The Commerce Department said housing starts tumbled by 9.8% in January, a plunge attributed to soft demand, elevated mortgage rates and a spate of unusually frigid weather.
Housing stocks were underperformers, dropping 1.5%.
The Dow Jones Industrial Average rose 71.25 points, or 0.16%, to 44,627.59. The S&P 500 gained 14.57 points, or 0.24%, at 6,144.15 and the Nasdaq Composite edged up 14.99 points, or 0.07%, to 20,056.25.
Among the 11 major sectors of the S&P 500, healthcare enjoyed the largest percentage gain, while materials and financials were the laggards.
Fourth-quarter earnings season is approaching the finish line, and 74% of the S&P 500 constituents have posted better-than-expected results, according to LSEG.
Analysts now see fourth-quarter S&P 500 earnings growth of 15.3% year-on-year, a significant improvement over the 9.6% estimate at the beginning of the year, according to LSEG.
Electric truck maker Nikola plunged 39.1% in the wake of its filing for Chapter 11 bankruptcy protection.
Specialty chemicals company Celanese tumbled 21.5% after reporting a quarterly loss.
Shares of Shift4 slid 17.5% following its fourth-quarter results and on news that the payments processor has agreed to buy Global Blue in a deal valued at $2.5 billion.
Shares of Global Blue jumped 17.5%.
Analog Devices gained 9.7% after beating quarterly profit and revenue estimates.
Declining issues outnumbered advancers by a 1.1-to-1 ratio on the NYSE. There were 254 new highs and 101 new lows on the NYSE.
On the Nasdaq, 1,962 stocks rose and 2,389 fell as declining issues outnumbered advancers by a 1.22-to-1 ratio.
The S&P 500 posted 28 new 52-week highs and seven new lows while the Nasdaq Composite recorded 96 new highs and 119 new lows.
Volume on U.S. exchanges was 16.36 billion shares, compared with the 15.57 billion average for the full session over the last 20 trading days.
Reuters