Canadian stocks experienced a significant downturn on Wednesday amid concerns that the Federal Reserve may maintain elevated interest rates for an extended period, should U.S. inflation figures exceed expectations.
The U.S. Commerce Department is set to release its report on personal income and spending for April, including the inflation metrics favored by the Federal Reserve. This data is anticipated to play a crucial role in shaping expectations for future interest rate adjustments ahead of the Federal Reserve's upcoming monetary policy meeting.
The decline was broad-based across Bay Street, with financials, utilities, materials, and energy sectors suffering notable losses. Shares from consumer discretionary, real estate, communications, and industrials sectors also ended the trading session significantly lower.
The benchmark S&P/TSX Composite Index, which commenced the session with a nearly 100-point gap downward at 22,170.16 (marking the day's high), closed with a loss of 367.07 points, or 1.65%, at 21,897.98, just a point above the day's low.
Bank of Montreal (BMO.TO) plunged nearly 9% as its financial results fell short of market expectations. The bank reported adjusted net income of C$2.03 billion, or C$2.59 per share, for the second quarter, compared to the previous year's C$2.19 billion, or C$2.89 per share.
Conversely, National Bank of Canada (NA.TO) saw its stock rise by more than 2.5%. The bank posted a net income of C$906 million, or C$2.54 per share, for the second quarter, up from C$832 million, or C$2.34 per share, in the same period last year, buoyed by revenue growth across all segments.
Several other notable declines were observed in Nutrien (NTR.TO), Bombardier Inc (BBD.B.TO), Cargojet (CJT.TO), Fairfax Financial Holdings (FFH.TO), Canadian Natural Resources (CNQ.TO), CGI Inc (GIB.A.TO), Boyd Group Services (BYD.TO), and Stantec (STN.TO), each losing between 2% and 3.4%.
Royal Bank of Canada (RY.TO), Colliers International (CIGI.TO), goeasy (GSY.TO), Thomson Reuters (TRI.TO), WSP Global (WSP.TO), and Franco-Nevada Corporation (FNV.TO) were among other significant decliners.
In contrast, Ag Growth International (AFN.TO) surged 11.1%. Softchoice Corporation (SFTC.TO) climbed 3.2%. Tecsys (TCS.TO), Kinaxis Inc (KXS.TO), Nuvei Corporation (NVEI.TO), and Cameco Corporation (CCO.TO) also recorded substantial gains.
