TSX Retreats After Fed Decision

The S&P/TSX Composite Index fell over 0.5% to trade near 35,500 on Wednesday after closing at a record high in the previous session, as investors assessed the Federal Reserve's latest policy decision. The Fed left interest rates unchanged, as expected, but three FOMC members favored a rate hike. Also, oil prices extended gains as tensions in the Middle East escalated following joint US-Saudi strikes in Iraq, fueling inflation concerns. Bond yields moved higher, pressuring banks and the broader index. RBC, TD Bank, BMO, CIBC, and Scotiabank each lost about 2%. In contrast, mining stocks rebounded alongside gold prices. Agnico Eagle and WPM gained about 1%, while Franco-Nevada rose 2%. Energy stocks also advanced on stronger crude prices, with Canadian Natural and Cenovus adding nearly 4% each. Cenovus also reported stronger second-quarter revenue and profit.

The S&P/TSX Composite Index fell nearly 1% to trade below 35,500 on Wednesday after closing at a record high in the previous session, weighed down by financials and miners. Oil prices rose as tensions in the Middle East escalated following joint US-Saudi strikes in Iraq, fueling inflation concerns and pushing bond yields higher. Investors also awaited the Fed's policy decision. While rates are expected to remain unchanged, markets are watching for possible dissenting votes in favor of a hike. RBC and Scotiabank lost more than 1.5%, while TD Bank, BMO, Brookfield, and CIBC fell about 2% each. Mining stocks also declined after Allied Gold (-16%) abandoned a proposed sale to a Chinese company and gold prices weakened. Agnico Eagle lost over 2%, Barrick fell nearly 3%, and WPM dropped 2.5%. In contrast, Canadian Natural rose nearly 4%, while Cenovus gained 5% after reporting stronger Q2 revenue and profit.

Futures tracking TSX stocks edged higher to a record high on Wednesday, supported by a good outlook for the energy sector. Oil prices rose as tensions in the Middle East escalated following joint US-Saudi strikes in Iraq, supporting energy stocks. Investors also assessed a batch of earnings from mining and energy companies. Cenovus reported higher second-quarter revenue and profit, supported by stronger oil prices. Agnico Eagle, Alamos Gold, Ivanhoe Mines, and Athabasca Oil are due to report results after the closing bell. Markets are also awaiting the US Fed's policy decision later in the day. While the Fed is widely expected to leave interest rates unchanged, investors are watching for possible dissenting votes in favor of a rate hike, reflecting divisions within the FOMC. Canadian bond yields moved higher ahead of the decision, tracking the rebound in oil prices and renewed inflation concerns, pressuring financial stocks.