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S&P/TSX composite down almost 150 points, U.S. stock markets fall

The exterior of the TMX is seen in Toronto, Wednesday, Nov. 1, 2023. THE CANADIAN PRESS/Chris Young

TORONTO — Canada's main stock index lost almost 150 points Thursday, led by weakness in utilities and base metals, while U.S. stock markets also fell.

The S&P/TSX composite index closed down 145.97 points at 22,200.79.

In New York, the Dow Jones industrial average was down 605.78 points at 39,065.26. The S&P 500 index was down 39.17 points at 5,267.84, while the Nasdaq composite was down 65.51 points at 16,736.03.

Bucking the broader market trend though was shares in Nvidia, which rose more than nine per cent Thursday, after the semiconductor giant reported stronger-than-expected earnings. Nvidia reported its profit surged 629 per cent in its latest quarter compared with a year earlier, and more than doubled its dividend.

The company keeps raising its own outlook, sending positive signals to investors as demand for its products keeps climbing, said Ashish Utarid, assistant vice-president of investment strategy with IG Wealth Management.

“They're expanding their business lines, their chips are in demand, they don't have enough supply to keep up, and those are all positive notes, which means that in the short term, Nvidia is going to continue to have record sales,” said Utarid.

But even a strong showing from one of the biggest players on Wall St. wasn’t enough to put markets in the green on Thursday. The Dow led losses on Wall St., declining 1.53 per cent.

“If (Nvidia) had missed, you would have seen a bigger decline, because what was priced in was already anticipated earnings growth, anticipated sales growth,” said Utarid.

With much of Nvidia’s success already priced into the market, investors seem preoccupied with bigger-picture debt levels and higher interest rates, he said. In particular, there’s concern within the real estate sector about the ability for commercial real estate to absorb higher interest rates over the next year, he said.

“This higher-for-longer narrative is going to continue. And that means over the next 12 months that commercial loans are going to renew at these higher rates.”

Expectations for a start to interest rate cuts from the U.S. Federal Reserve have been pushed back as 2024 progresses with economic data continuing to come in stronger than expected.

Two economic reports Thursday in the U.S. added to that pile. One preliminary report suggested growth in U.S. business activity is at its fastest rate in more than two years, while another showed the job market remaining solid, as fewer workers applied for unemployment benefits last week than expected.

In Canada, TD kicked off bank earnings on Thursday. The bank saw its second-quarter profit fall 22 per cent from a year earlier thanks to costs related to a failure of its U.S. anti-money laundering program.

The bank’s stock price declined 1.6 per cent.

The Canadian dollar traded for 72.98 cents US compared with 73.13 cents US on Wednesday.

The July crude contract was down 70 cents at US$76.87 per barrel and the June natural gas contract was down 19 cents at US$2.66 per 1,000 cubic feet.

The June gold contract was down US$55.70 at US$2,337.20 an ounce and the July copper contract was down six cents at US$4.79 a pound.

-- With files from The Associated Press

This report by The Canadian Press was first published May 23, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

Rosa Saba, The Canadian Press

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