Canadian Stocks Tumble As Traders Analyze BoC Summary, U.S. Unemployment Data

(RTTNews) - Canadian stocks plunged on Thursday as traders deconstructed the Bank of Canada's Summary of Deliberations with more focus on its warnings to the economy.

In addition, while investors parsed U.S. unemployment numbers, renewed valuation pressure in U.S. IT stocks also seeped into the Canadian IT sector heavily and pulled down the market.

After opening slightly above yesterday's close, today the benchmark S&P/TSX Composite Index gave ground early in the session and saw further downside as the day progressed before settling at 32,465.28, down by 788.91 points (or 2.37%).

Three of the 11 sectors posted gains today, with the consumer staples sector leading the pack.

The Bank of Canada's Summary of Deliberations from its interest rate decision last month was released yesterday.

The report revealed that the governing council of the central bank highlighted that persisting geopolitical turbulence and growing trade uncertainty have increased the risks to its economic outlook for Canada and thereby made it difficult for it to predict which way interest rates are heading.

Last month, the BoC maintained its policy interest rate on hold at 2.25%. While announcing the rates, the central bank asserted that it would respond appropriately if the economic outlook changed. The next monetary policy decision announcement is scheduled for March 18.

The council has highlighted three key risk areas - the upcoming Canada-United States-Mexico trade agreement's renewal, ongoing geopolitical events, and trade disruptions.

On the economic front, it was uneventful day for Canada with no specific data releases.

Today in the U.S., the Department of Labor revealed that initial jobless claims fell by 5,000 from the previous week to 227,000 (in the first reading for February), above market expectations of 222,000.

However, continuing jobless claims increased to 1,862,000 for the week ending January 31 from 1,841,000 of the previous week.

Today, a sell-off in the U.S. technology sector triggered by concerns of large-scale disruption caused by advancements in AI on traditional software companies, transmitted to Canada's IT sector, weighing down on the index.

Canada's Prime Minister Mark Carney is battling hard to mend trade ties with the U.S.

After hitting Canada with 35% tariffs, U.S. President Donald Trump halted all trade talks with Canada and is now planning to quit the CUSMA pact, which will be up for renewal later this year.

Days before, Trump threatened to block the opening of the brand-new Gordie Howe International Bridge that connects Detroit, Michigan, with Windsor, Ontario, and is set to open early this year.

Accusing Canada of not compensating the U.S. enough, Trump added that the U.S. should own at least half of the under-construction grand structure.

On Tuesday, Carney clarified that he had informed Trump that Canada had already paid for the construction.

Last night, the House of Representatives voted to overturn the tariffs imposed on Canada by Trump. Six Republicans voted against the tariffs, defying Trump's objective.

With the draft now heading to the Senate for voting, economists are skeptical of its success, as they warn that Trump will veto the bill.

Adding a new political challenge for Mark Carney, separatists in Alberta have speeded up a petition campaign with the goal to garner support for their claims to separate from Canada.

The group aims to collect around 177,000 signatures by May 2, the minimum threshold for a citizen-led referendum to validate demands to break away.

Western Canada's Alberta (the fourth largest province in Canada) shares around a 300 kms long land border with the U.S. state of Montana.

Weeks before, when reports surfaced that these separatists met officials from Trump's administration, Carney asked the U.S. to "respect Canada's sovereignty."

Major sectors that gained in today's trading were Consumer Staples (1.65%), Utilities (1.53%), and Communication Services (0.48%).

Among the individual stocks, Saputo Inc (3.64%), The North West Company Inc (3.36%), Loblaw CO (2.53%), AltaGas Ltd (3.76%), Emera Incorporated (3.22%), and Rogers Communications Inc (2.24%) were the prominent gainers.

Major sectors that lost in today's trading were Materials (5.89%), Industrials (4.03%), IT (3.71%), Real Estate (2.97%), Energy (1.70%), and Consumer Discretionary (1.70%).

Among the individual stocks, Novagold Res Inc (13.50%), Dundee Precious Metals Inc (12.40%), Aya Gold and Silver Inc (11.54%), Sylogist Ltd (8.98%), Celestica Inc (7.02%), and Shopify Inc (6.15%) were the notable losers.

Sun Life Financial Inc (6.32%) and Keyera Corp (3.97%) were among the prime market-moving stocks today.