Canadian markets down amid tech weakness and rising oil prices, with the S&P/TSX composite slipping 76.30 points to 35,263.85 on Friday.
Tech sector drags the TSX lower
The decline was led by the technology segment, which holds the largest weight on the index. Falling shares of artificial‑intelligence focused companies mirrored a broader pullback in U.S. markets, where the Nasdaq composite lost 361.70 points to finish at 25,520.24. Analysts have warned that many AI‑related stocks have risen faster than the underlying demand for compute power, prompting concerns about sustainability.
Steve Locke, chief investment officer for fixed income and multi‑asset strategies at Mackenzie Investments, said the “ebb and flow around the AI cycle, the technology cycle and what we’re seeing globally has had an impact here in North American stocks.” He added that the volatility was relatively minor, but it was enough to push the TSX lower.
Among the U.S. heavyweights, Nvidia fell 2.2 percent, briefly losing its status as the most valuable public company before regaining the top spot later in the session. The pressure on chip makers and other AI darlings has persisted for weeks as investors weigh the risk that projected productivity gains may not materialize.
Energy prices rise as Middle East tensions flare
At the same time, oil markets were buoyed by renewed hostilities in the Middle East. The United States expanded its airstrike campaign against Iran, targeting bridges and a port tower, raising concerns over the security of the Strait of Hormuz. Brent crude jumped 4.6 percent to settle at US$88.10 a barrel, while the North American West Texas Intermediate benchmark rose US$3.50 to US$81.78.
Locke noted that “the unfortunate conflict continuing in the Middle East … we see an impact on energy prices when shots are being fired again between Iran and the U.S.” The higher oil prices lifted the energy sector, offsetting some of the tech‑related losses.
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The Canadian dollar slipped to 71.36 U.S. cents, a modest move from the previous day’s 71.24 cents, reflecting the mixed influence of commodity prices and broader market sentiment.
Upcoming inflation data adds uncertainty
Friday’s trading took place ahead of a key inflation report from Statistics Canada due on Monday. A poll of economists expects the June consumer price index to cool to 2.9 percent, down from May’s 3.2 percent, according to analysts. Lower gas prices in June have already helped bring the annual inflation rate below three percent, but analysts caution that the resurgence in oil prices could weigh on July’s figures.
Locke observed that “the Canadian economy has grown decently and inflation here on the core side has actually been close to the Bank of Canada’s target around two per cent.” He suggested the inflation outlook is less challenging for policymakers than in other major economies.
U.S. market moves and earnings pressure
In New York, the Dow Jones industrial average dropped 406.55 points to 52,146.42, while the S&P 500 slipped 76.08 points to 7,457.69. Earnings reports added to the strain; Netflix shares fell 7.3 percent after its revenue fell just short of analysts’ expectations, even though its profit was bigger than expected. The company’s forward guidance for the summer also came in below analysts’ forecasts.
Overall, the trading session highlighted a blend of technology weakness, commodity price changes, and upcoming macroeconomic data that together nudged both Canadian and U.S. equities lower.
Investors remain cautious.
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