TSX Ends Lower for Third Day as Technology Shares Slide Amid Economic Data and Fed Rate Cut Concerns

Strategic Insights -

Economic data and comments from a Federal Reserve official have increased uncertainty over the outlook for interest rate cuts from the U.S. central bank, causing stocks to end lower on Thursday. Investor expectations of another 25 basis point cut in the Fed's October meeting decreased to 83.4% from about 92% on Wednesday, according to the CME FedWatch Tool. "The economic data that's come out over the last day or two is kind of confusing in that, in my mind, it calls into question" how much the Fed may cut rates again and whether the Fed needs to cut rates again this year, said Peter Tuz, president of Chase Investment Counsel.

Key Takeaways:

  • The TSX ended lower for the third day, with the S&P/TSX composite index falling 24.97 points, or 0.1%, to 29,731.98, extending its pullback from a record closing high on Monday.
  • Technology shares slid 2.5%, with Constellation Software down 6% after company president Mark Leonard resigned for health reasons.
  • Intel shares jumped 8.9% after the company approached Taiwan Semiconductor Manufacturing Company about investments in manufacturing or partnerships.
  • The materials group, which includes metal mining shares, rose 1.1% as the price of gold moved closer to its recent record high.
  • CarMax shares fell 20.1% after the used-car retailer reported lower second-quarter profit.
  • Accenture shares were down 2.7% despite reporting revenue above expectations.

Statistics:

  • The TSX technology sector fell 2.5%.
  • Constellation Software shares dropped 6%.
  • Intel shares rose 8.9%.
  • The Dow Jones Industrial Average fell 173.96 points, or 0.38%, to 45,947.32.
  • The S&P 500 lost 33.25 points, or 0.50%, to 6,604.72.
  • The Nasdaq Composite lost 113.16 points, or 0.50%, to 22,384.70.
  • Investor expectations of another 25 basis point cut in the Fed's October meeting decreased to 83.4%.
  • The CME FedWatch Tool reported that investor expectations decreased from about 92% on Wednesday.

Sources:

  • The Wall Street Journal
  • Reuters
  • Globe and Mail

Note: The sources are cited as they appear in the original text, with exact formatting and no embellishments.