The S&P/TSX composite index oscillated between gains and losses through the Tuesday trading day, ultimately ending modestly lower, while U.S. markets declined.
The S&P/TSX composite index was down 4.34 points at 32,870.36, as strength in basic materials and energy wasn’t quite enough to offset a decline in the financial sector.
Brent Joyce, chief investment strategist at BMO Private Wealth, said a rise in oil stemming from tensions in Iran helped lift energy names.
“You also continue to see recovery in the Canadian energy patch from the sell-off we had on the Venezuela news, where Venezuela is perceived to be a key competitor for the same type of heavy crude that Canada produces,” he said.
Joyce said the selloff in the Canadian energy sector was an “overreaction.”
“As to whether Venezuela is legitimately a threat to the Canadian energy patch, I would say in the short to medium term, absolutely not,” he said.
The February crude oil contract was up US$1.65 at US$61.15 per barrel.
Meanwhile, the February gold contract was down US$15.60 at US$4,599.10 an ounce, after a big jump on Monday.
“Uncertainty emanates from the White House on a variety of policies from both domestic and international that have central banks looking to add to gold reserves, more so than the U.S. Treasury bills,” he said.
“The weighting of gold miners in the Canadian market versus the U.S. is much more substantial, and can move the needle.”
In New York, the Dow Jones industrial average was down 398.21 points at 49,191.99. The S&P 500 index was down 13.53 points at 6,963.74, while the Nasdaq composite was down 24.03 points at 23,709.87.
Wall Street slipped from its records as investors sifted through the latest U.S. inflation report and a mixed start to the latest profit reporting season for big U.S. companies.
Consumer prices rose 0.3% in December from the prior month, the Labor Department said Tuesday, the same as in November. The data strengthened expectations that the U.S. Federal Reserve will cut its main interest rate at least twice in 2026 to shore up the job market.
U.S. companies are under pressure to deliver strong growth in profits to justify the runs to records their stock prices have made.
JPMorgan Chase helped kick off the latest reporting season by delivering weaker profit and revenue than analysts expected. Its stock fell 4.2% and was one of the heaviest weights on the market.
The shortfall may have been because some analysts hadn’t updated their estimates to account for an earnings hit resulting from the bank’s purchase of the Apple Card credit card portfolio.
“The sectors that are a little bit more cyclically tied to the underlying health of the (U.S.) economy are doing well, and that’s because the earnings announcements, particularly from JPMorgan, suggested that the U.S. consumer continues to be in good shape,” Joyce said.
The Canadian dollar traded for 72.01 cents US compared with 72.07 cents US on Monday.
— With files from The Associated Press