TSX Futures Dip on Tech Selloff

The S&P/TSX Composite Index fell 0.5% to trade below the 35,000 mark on Tuesday, tracking global equities amid a broad selloff in technology stocks and persistent concerns over elevated interest rates. Worries that speculative AI spending by hyperscalers is running ahead of fundamentals weighed on North American tech shares and hurt overall risk appetite. Celestica plunged nearly 7%, leading losses in the tech sector. Gold prices also declined, extending pressure on mining stocks after the hawkish projections from the US Federal Reserve last week. Agnico Eagle, Barrick, and Franco-Nevada lost around 3%, while WPM fell more than 4%. Meanwhile, oil prices dropped for a second straight session as supply concerns eased amid progress in restoring shipments through the Strait of Hormuz, reducing fears of energy-driven inflation but weighing on energy shares.

Futures tracking the S&P/TSX Composite Index fell on Tuesday, tracking global equities amid a selloff for tech companies in the US and risks of high interest rates. Concerns that the volume in speculative spending on AI by hyperscalers was not backed by fundamentals pressured North American tech stocks and lowered risk sentiment across equity markets. Shopify was set to open sharply lower. Gold prices also declined, weighing on mining shares to extend their pressure after the hawkish projections by the US Fed last week. Meanwhile, oil prices fell for a second straight session as supply concerns eased amid progress in restoring shipments through the Strait of Hormuz, reducing fears of energy-driven inflation but weighing on energy stocks.

The S&P/TSX Composite Index rose 0.4% to close at 35,002 on Monday as investors assessed US-Iran peace talks and Canada’s May inflation report. The US and Iran reportedly made progress in their first round of talks aimed at reaching a final peace deal. Oil prices fell, easing concerns over energy-driven inflation pressures. Meanwhile, annual inflation accelerated more than expected, driven by higher gasoline prices. However, the data is unlikely to alter the Bank of Canada’s view on underlying inflation, as core price measures remained soft. The BoC said earlier this month it saw limited evidence that higher energy prices were feeding into broader inflation. In addition, Canada’s banking regulator lowered capital requirements for the country’s largest lenders, a move expected to support credit growth. Banking stocks advanced, with RBC up 1% and BMO gaining 1.2%. Elsewhere, higher gold prices lifted Agnico Eagle by 2.2%, WPM by 4.7%, and Barrick by 1.2%.