Canadian stocks fall as Fed signals more rate hikes

Canadian stocks fall as Fed signals more rate hikes

Canada's main stock index fell at Thursday's opening bell, with materials stocks feeling the pinch. On Wall Street, the Federal Reserve signalled that rates will likely stay higher for longer will also be affecting key indexes.

ET, the Toronto Stock Exchange's S&P/TSX composite index slipped 115.7 points, or 0.57 percent, at 20,098.99.

The Dow Jones was down 108.65 points, or 0.32 percent, at the close of trading at 34,332.23. The S&P 500 was down 27.84 points, or 0.63 per cent, at 4,374.36, while the Nasdaq Composite dropped 141.07 points, or 1.05 per cent, to 13,328.06 at the opening bell.

OANDA senior analyst Ed Moya said.

On Wednesday, the Fed left rates unchanged but signalled support for one more hike before the year's end and fewer cuts next year in the wake of stronger-than-expected U.S. economic data.

Powell said Powell wants convincing evidence that inflation is under control and won't be happening anytime soon given the gas price trajectory and the current state of the labor market.

The Bank of Canada, which released deliberations Tuesday from its most recent meeting, remains unsure whether rates are high enough to control inflation, but are trying to balance the risks of doing too little to control prices against the risks of doing too much and unduly harming the economy, the Globe's Mark Rendell reports.

Overseas, the pan-European STOXX 600 was down 1.14 per cent at the end of the day. The FTSE 100, down 0.33 percent, was down by 0.33 percent. Early Thursday, the Bank of England held interest rates steady following a long run of increases after a surprise slowdown in inflation.

Germany's DAX and France's CAC 40 fell 1.24 per cent and 1.57 per cent, respectively.

Japan's Nikkei closed down 1.37 per cent in Asia. The Hang Seng in Hong Kong was down 1.29 per cent.

Crude prices fell in early trading as worries about high interest rates offset supply worries.

Brent's stock price remained stable at US$92.25 to US$93.16 in the early premarket period. West Texas Intermediate's range was US$88.39 to US$89.38. Both benchmarks fell more than 1 per cent in the predawn period.

''T happen will lead to a minor pullback here for oil'', OANDA's Ed Moya said in a note.

Crude prices jumped earlier in the month after OPEC+ members Saudi Arabia and Russia extended voluntary production curbs through the end of the year.

The most recent inventory data from the U.S. came in close to forecasts, offering little direction for crude prices.

Mr Moya, speaking on condition of anonymity, said: If you have any questions, please give me a call.

Gold prices, also dipped in early trading as the dollar gained on the latest Fed comments.

The value of gold rose by 0.1 per cent on Friday to US$1,927.84 per ounce. U.S. gold futures were down 1% to US$1,948.10.

The Canadian dollar fell despite a stronger risk sentiment and lower crude prices, while its U.S. counterpart hit its best level in more than six months against a group of currencies.

The loonie closed at 74.05 US cents to 74.35 US cents ahead of the North American opening bell.

On global markets, the U.S. dollar index, which measures the currency against a basket of rivals, rose as high as 105.68, its strongest since early March, but slightly lower at 105.45, according to data from Reuters.

The pound was trading at an all-time low of US$1.2316, just above a fresh four-month low against the US dollar ahead of the Bank of England's policy announcement. After the central bank said it would keep rates unchanged, the pound fell to its lowest against the US dollar since March.

The Euro was trading at US$1.0658 after falling to a six-month low of US$1.0617, Reuters reported.

In bonds, the yield of the U.S. 10-year note rose at 4.43 percent in the predawn period.

FedEx surprise investors with a big quarterly profit beat on Wednesday, after it cut costs and poked customers from rivals UPS and Yellow ahead of the crucial holiday shipping season. FedEx shares rose more than 4 percent inmoring trading after the global delivery firm reported a 32% jump in fiscal first-quarter adjusted earnings, to US$4.55 per share - 82 cents more than Wall Street expected. Cisco Systems said it plans to buy Splunk, a cyber security firm, for about 28 billion dollars. Cisco's offer price of US$157 per share in cash represents a premium of about 31% to Splunk's closing price on Wednesday. With the deal, Splunk CEO Gary Steele will be joined by Cisco's executive leadership team, which will report to Cisco CEO Chuck Robbins. The first week of last week's U.S. jobless claim was up for auction at 7:50 a.m. ET.

830 am ET: U.S. current account deficit, based on last year's trends, analysts said.

The U.S. Federal Reserve's Philadelphia Fed Index was up at 830 am ET on Monday.

U.S. existing home sales may be closed by the end of the month.

A leading indicator for U.S. stocks on the market at 10 am ET.