Canadian Stocks Fall As BoC And Fed Keep Up The Suspense

(RTTNews) - Canadian stocks declined on Tuesday as cautious investors refrained from major bets ahead of the interest rate decisions by the Bank of Canada as well as the US Federal Reserve, although data from both nations support lowering rates.

After opening just below yesterday's close, the benchmark S&P/TSX Composite Index immediately lost momentum to trade firmly negative throughout the session and finally close at 29,315.23, down by 115.79 points (or 0.39%).

Only two of the 11 sectors, namely Energy and IT posted gains today.

After being slapped with 35% tariffs on all Canadian exports to the US by President Donald Trump, Canadian Prime Minister Mark Carney is pursuing a broader strategy of weaning Canada off its reliance on the US as a marketplace by diversifying trade ties across North America and beyond.

Carney is traveling to Mexico on September 18 to meet Mexican President Claudia Sheinbaum to reinforce trade cooperation between both nations. Mexico also stands to gain from Carneys' efforts, as both countries have been affected by huge tariffs from the US.

Data released by Canada Mortgage and Housing Corporation today revealed that housing starts in Canada declined 16% in August to 245,791 units from a revised 293,537 in July.

Data released by Statistics Canada today revealed that the annual inflation rate in Canada rose to 1.9% in August from 1.7% in July. On a seasonally adjusted monthly basis, the CPI rose 0.2% in August.

With interest rates currently at 2.75%, traders believe the likelihood of the Bank of Canada cutting interest rates tomorrow is much higher against the backdrop of today's inflation data.

In the US, the two-day FOMC meeting to decide on interest rates began today. Recent jobs and inflation numbers from the US have added fuel to expectations of a rate cut announcement tomorrow.

Canada-US trade talks stand paralyzed after a federal appeals court, on August 29, deemed the "reciprocal tariffs" imposed by Trump almost all trading partners as "overreach of position" and "illegal."

Shocked by this judgment, the administration is battling against the verdict in the US Supreme Court, which has agreed for a fast-track hearing that will commence in November.

As it stands, countries that have already signed a deal with the US and others (like Canada and India) who are yet to strike a pact are confused with this development and unsure of the outcome.

On the business front, the $53 billion merger agreement between Anglo American and Teck Resources announced last week to create a new and bigger global critical minerals producer - named Anglo Teck - is to be scrutinized by the Competition Bureau Canada for analyzing the anti-competitive impacts.

Major sectors that gained in today's trading were Energy (2.50%) and IT (0.43%).

Among the individual stocks, Baytex Energy Corp (9.48%), Tourmaline Oil Corp (4.71%), Whitecap Resources Inc (4.51%), Parex Resources Inc (3.74%), Bitfarms Ltd (17.01%), and Computer Modelling Group Ltd (4.35%) were the prominent gainers.

Major sectors that lost in today's trading were Utilities (0.78%), Consumer Discretionary (0.91%), Materials (1.94%), and Healthcare (2.82%).

Among the individual stocks, Algonquin Power and Utilities (1.43%), Magna International (1.70%), Orla Mining Ltd (10.17%), Alamas Gold Inc (5.67%) and Wesdome Gold Mines Ltd (5.59%) were the notable losers.