Canadian stocks experienced a significant decline on Thursday, driven by diminishing expectations for a series of Federal Reserve rate cuts this year, along with weak commodity prices contributing to a bearish market sentiment.
The benchmark S&P/TSX Composite Index closed with a loss of 263.44 points, equating to a 1.2% drop, ending the session at 21,698.11, slightly above its intraday low of 21,680.06.
Notably, shares in the energy, materials, and financial sectors were the primary laggards of the day. Reflecting the widespread selling pressure, all sectoral indices concluded the session in negative territory.
The Energy Capped Index plummeted by 3.07%, while the Materials Capped Index and the Financials Index recorded losses of 1.75% and 1.28%, respectively.
Among the major decliners, Sprott Inc. (SII.TO), Tourmaline Oil Corp. (TOU.TO), Bombardier Inc. (BBD.B.TO), Agnico Eagle Mines Ltd. (AEM.TO), and Precision Drilling Corp. (PD.TO) saw their shares fall between 2% and 4%.
Other prominent losers included Franco-Nevada Corporation (FNV.TO), goeasy Ltd. (GSY.TO), Constellation Software Inc. (CSU.TO), Fairfax Financial Holdings Ltd. (FFH.TO), TFI International Inc. (TFII.TO), and Thomson Reuters Corporation (TRI.TO), which also ended the session noticeably lower.
Energy stocks such as Cenovus Energy Inc. (CVE.TO), Parex Resources Inc. (PXT.TO), Vermilion Energy Inc. (VET.TO), Canadian Natural Resources Ltd. (CNQ.TO), International Petroleum Corporation (IPCO.TO), Suncor Energy Inc. (SU.TO), Paramount Resources Ltd. (POU.TO), and MEG Energy Corp. (MEG.TO) closed sharply down.
In the materials sector, Alamos Gold Inc. (AGI.TO), MAG Silver Corp. (MAG.TO), First Quantum Minerals Ltd. (FM.TO), Methanex Corp. (MX.TO), and Hudbay Minerals Inc. (HBM.TO) recorded losses ranging from 2.4% to 4.4%.
Financial sector stocks also took a hit, with Laurentian Bank of Canada (LB.TO), Manulife Financial Corp. (MFC.TO), Sun Life Financial Inc. (SLF.TO), Canadian Western Bank (CWB.TO), National Bank of Canada (NA.TO), and Toronto-Dominion Bank (TD.TO) seeing substantial declines.
Following yesterday's lower-than-anticipated consumer price inflation data, the U.S. Labor Department released a report this morning showing a modest decrease in producer prices for the month of May.
According to the report, the producer price index for final demand dipped by 0.2% in May after a 0.5% increase in April, contrary to economists' expectations of a 0.1% rise.
Additionally, the annual rate of producer price growth slowed to 2.2% in May from an upwardly revised 2.3% in April, although economists had expected an acceleration to 2.5% from the originally reported 2.2% in the previous month.
