TORONTO — Canada's main stock index eked out a new record Tuesday as oil prices rose, sending energy stocks higher. Meanwhile, U.S. markets broadly fell, led by a 1.5-per-cent drop on the Nasdaq.
Energy stocks put the S&P/TSX composite in the green even as most other sectors were down. The index closed up 33.62 points at 24,033.99, just a hair above the record it set last week when it closed above 24,000 for the first time.
“Broadly, there's a bit of a risk-off sentiment here happening across not all markets, but most markets,” said Dustin Reid, vice-president and chief strategist for fixed income at Mackenzie Investments.
“I think people are obviously concerned about the escalation in geopolitical risk globally, particularly out of the Middle East.”
Oil prices jumped Tuesday as conflict in the Middle East ramped up, with Iran firing missiles into Israel.
The November crude oil contract was up US$1.66, or 2.44 per cent, at US$69.83 per barrel.
So far this year, global demand, OPEC announcements and news from China have been the main drivers of oil price movements, Reid said, with the conflict in the Middle East playing a smaller role.
But the escalation sparks fears of a major supply issue in the near future, he said.
A sustained rise in oil prices would make central banks’ interest rate decisions more difficult, said Reid, as gasoline prices play an important role in inflation both directly and indirectly.
In New York, the Dow Jones industrial average was down 173.18 points at 42,156.97. The S&P 500 index was down 53.73 points at 5,708.75, while the Nasdaq composite was down 278.81 points at 17,910.36.
Investors on Tuesday took some profits from sectors that have done well this year, said Reid, namely technology.
But oil and gas companies and defence companies saw their stock prices buck the trend and rise higher.
A pair of economic reports in the U.S. Tuesday offered a mixed view on the economy, with a weaker-than-expected report on manufacturing but a stronger-than-expected report on job openings.
“The big takeaway, I think, is the labour market in the U.S. is softening but it’s certainly not falling apart,” said Reid.
In recent months, the U.S. Federal Reserve has increasingly turned its focus to jobs data, said Reid. Friday will bring the monthly payrolls report, which has become a bigger market-mover than inflation these days, he added.
The Canadian dollar traded for 74.05 cents US compared with 74.08 cents US on Friday. The loonie was closed for trading on Monday due to the National Day for Truth and Reconciliation.
The November natural gas contract was down two cents at US$2.90 per mmBTU.
The December gold contract was up US$30.90 at US$2,690.30 an ounce and the December copper contract was up four cents at US$4.59 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Oct. 1, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Rosa Saba, The Canadian Press
