Canadian Stocks Drop on Fed Outlook

2026-06-17 20:25 By Isabela Couto 1 min. read

The S&P/TSX Composite Index fell 0.7% to close at 35,125 on Wednesday as investors digested the Fed's latest policy decision.

As widely expected, the Federal Reserve left interest rates unchanged.

However, its projections were viewed as more hawkish than anticipated, with roughly half of FOMC members expecting at least one rate hike this year.

The Fed also sharply raised its inflation forecasts, pushing Canadian bond yields higher and fueling concerns that borrowing costs could remain elevated.

Financial stocks traded mixed, with TD Bank gaining 1.2% while Brookfield fell 1.1%.

Energy shares weighed on the index as oil prices hovered near a three-month low amid prospects for the reopening of the Strait of Hormuz and after the International Energy Agency warned of a supply overhang next year.

Canadian Natural lost 1.4%, while Suncor shed 2.5%.

Mining stocks also traded lower amid falling gold prices, with Barrick down 2.6% and WPM losing 0.8%.



News Stream
Canadian Stocks Drop on Fed Outlook
The S&P/TSX Composite Index fell 0.7% to close at 35,125 on Wednesday as investors digested the Fed's latest policy decision. As widely expected, the Federal Reserve left interest rates unchanged. However, its projections were viewed as more hawkish than anticipated, with roughly half of FOMC members expecting at least one rate hike this year. The Fed also sharply raised its inflation forecasts, pushing Canadian bond yields higher and fueling concerns that borrowing costs could remain elevated. Financial stocks traded mixed, with TD Bank gaining 1.2% while Brookfield fell 1.1%. Energy shares weighed on the index as oil prices hovered near a three-month low amid prospects for the reopening of the Strait of Hormuz and after the International Energy Agency warned of a supply overhang next year. Canadian Natural lost 1.4%, while Suncor shed 2.5%. Mining stocks also traded lower amid falling gold prices, with Barrick down 2.6% and WPM losing 0.8%.
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The S&P/TSX Composite Index was little changed around the 35,000 mark on Wednesday as investors weighed the Fed's latest policy decision and awaited confirmation of a US-Iran peace agreement. As expected, the Fed kept interest rates unchanged at 3.50%-3.75% and signaled a more hawkish outlook, reinforcing expectations that borrowing costs could remain elevated for longer. However, easing energy-related inflation concerns helped push Canadian bond yields lower, supporting financial stocks. RBC, TD Bank, and BMO gained about 1%, while Scotiabank advanced nearly 2%. In contrast, energy shares came under pressure on expectations of a normalization in Middle East oil supplies, with Suncor and Imperial Oil losing more than 2%.
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