TORONTO - Canada's main stock index moved lower Wednesday, weighed down by losses in energy and metals, while U.S. markets were mixed on the heels of the latest data on inflation.
Consumer prices in the U.S. rose in April, up 0.4 per cent on a monthly basis and 4.9 per cent year-over-year. The data showed some cooling in inflation in key areas including grocery prices and services, helping bolster market confidence that the Federal Reserve will hold its interest rate steady instead of hiking at its next meeting.
But markets were mixed Wednesday despite the relatively positive reading.
The S&P/TSX composite index was down 86.42 points at 20,499.31.
In New York, the Dow Jones industrial average was down 30.48 points at 33,531.33.The S&P 500 index was up 18.47 points at 4,137.64,while the Nasdaq composite was up 126.89 points at 12,306.44.
鈥淭here鈥檚 (these) opposing forces,鈥 said Ashish Utarid, assistant vice-president of investment strategy at IG Wealth Management. 鈥淲e鈥檝e got the impending debt ceiling negotiations, and we鈥檝e got positive inflation data.鈥
The U.S. government has been nearing a possible default on its debt, which economists warn could be catastrophic for the economy and financial markets. Congress is expected to come to a deal on raising the debt ceiling before a June 1 deadline, but talks so far haven鈥檛 resulted in a breakthrough.
The debt ceiling negotiations are a 鈥渃loud on the horizon鈥 for markets, said Utarid.
鈥淎ny default on the debt of the U.S. ... would send the markets into a bit of a tailspin,鈥 he said.
Inflation is still well above the Fed鈥檚 target, but Utarid said the central bank is still expected to pause at its next meeting, and he鈥檚 hoping they will also provide some messaging indicating they intend to hold the pause.
鈥淐lear messaging in June would really make it more predictable for lending rates,鈥 he said.
Oil has been relatively rangebound in recent weeks, noted Utarid, down from its highs but also staying above US$70 a barrel. That鈥檚 good news for inflation, he said.
鈥淚f we have oil stay in a predictable range, it鈥檒l continue to help prices come down,鈥 he said.
The 好色tv dollar traded for 74.77 cents US compared with 74.68 cents US on Tuesday.
The June crude contract was down $1.15 at US$72.56 per barrel and the July natural gas contract was down nine cents at US$2.34 per mmBTU.
The June gold contract was down US$5.80 at US$2,037.10 an ounce and the July copper contract was down six cents at US$3.84 a pound.
鈥 With files from Associated Press
This report by 好色tvwas first published May 10, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
