Canadian stocks edge higher while US markets slide on tech weakness and rising fiscal concerns
US stocks retreated on Tuesday as investors weighed rising bond yields, fresh tariff uncertainty, and the start of what is often a weak month for equities.
According to CNBC, the Dow Jones Industrial Average fell 249.07 points, or 0.55 percent, to 45,295.81. The S&P 500 slid 0.69 percent to 6,415.54, while the Nasdaq Composite dropped 0.82 percent to 21,279.63.
BNN Bloomberg reported that Canada’s S&P/TSX composite index gained 51.17 points to close at 28,615.62, as strength in basic materials offset broader weakness.
The Canadian dollar slipped to 72.52 cents US compared with 72.77 cents US on Friday.
In commodities, October crude oil rose US$1.58 to US$65.59 per barrel, while December gold climbed US$76.10 to US$3,592.20 an ounce.
Technology stocks led Wall Street lower, with Nvidia shedding 2 percent and weighing most heavily on the S&P 500. Amazon shares sank 1.6 percent, and Apple fell 1 percent.
Rising bond yields added to pressure, as the US 10-year Treasury yield rose to 4.27 percent and the 30-year yield topped 4.97 percent.
When bonds offer higher returns, investors are often less willing to pay for stocks trading at elevated valuations.
Ross Mayfield, investment strategist at Baird Private Wealth Management, told CNBC that “a 30-year Treasury of 5 percent is a headwind, no doubt about it,” adding that it will likely remain a challenge for equities.
Concerns over tariffs also weighed on sentiment.
CNBC reported that a US federal appeals court ruled in a 7-4 decision that most of Donald Trump’s global tariffs were illegal, finding that only Congress can impose broad levies.
Trump called the ruling “Highly Partisan” and said he would appeal to the US Supreme Court.
BNN Bloomberg noted that the court left tariffs in place for now, but uncertainty remains.
One company in the chemical products industry told the Institute for Supply Management that there was “too much uncertainty for us and our customers regarding tariffs and the US/global economy,” while orders across most product lines had weakened.
Bond investors have expressed concern that a potential refund of billions in tariff revenues could strain the US fiscal position.
According to BNN Bloomberg, Trump’s repeated criticism of the Federal Reserve for not cutting interest rates sooner has also heightened fears of diminished Fed independence, which could affect its ability to keep inflation in check.
Wall Street entered September after a strong August, in which the S&P 500 climbed nearly 2 percent and surpassed 6,500 for the first time, recording five new all-time highs.
Sam Stovall, chief investment strategist at CFRA Research, said that in years when the index notched 20 or more new highs by the end of August, September still brought average declines.
The market’s focus now turns to economic data, with Friday’s US jobs report seen as a key influence on the US Federal Reserve’s mid-month interest rate decision.
Meanwhile, corporate news added to market turbulence.
Constellation Brands slumped 6.6 percent after warning of weaker beer sales, while Kraft Heinz fell 7 percent after announcing plans to split into two companies.
Among gainers, PepsiCo rose 1.1 percent following pressure from Elliott Investment Management for performance improvements.
Overseas, Germany’s DAX lost 2.3 percent, while markets in Asia posted mixed results, with Seoul up 0.9 percent and Hong Kong down 0.5 percent.
