Canadian Stocks Slip As Investors Avoid Big Bets Ahead Of U.S. Data

(RTTNews) - Canadian stocks move lower on Tuesday as traders stayed away from making big moves as they anticipated the upcoming key economic releases from the U.S. Gains in the energy sector driven by soaring oil prices were dented by a downturn in IT stocks led by "AI bubble" concerns.

After opening below yesterday's close, the benchmark S&P/TSX Composite Index gave ground early in the session only regain momentum later post noon to finally close at 30,036.46, down by 39.75 points (or 0.13%).

Three of the 11 sectors posted gains today, with the energy sector leading the pack.

The U.S. shutdown which began on October 1 ended last week.

Based on the private job reports released during the shutdown, markets were anticipating another rate cut by the U.S. central bank in December. However, comments by U.S. Federal Reserve officials since last week went against the need for a rate cut and prompted investors to scale down expectations.

Now, the upcoming key data releases could decide the path that Fed will take on monetary policy.

Wary of the prevailing uncertainty in the economy, investors in the U.S. and Canada are taking measured steps while concerns of an "AI bubble" pulled down tech stocks in both countries.

On November 4, Canadian Prime Minister Mark Carney presented his first federal budget.

Carney's budget raises Canada's deficit to a projected C$78 billion. The budget proposes C$140 billion in new spending over the next five years along with cuts to the public service to save billions of dollars.

The budget underwent voting yesterday in Canadian parliament.

As a defeat would have spurred another early election, markets were concerned of its victor. However, it was passed with 170 votes in favor and 168 against. Carney received the support from opposition MPs including Elizabeth May, leader of the Green Party.

This victory is crucial for Carney who is fighting hard to normalize the effects of 35% tariffs imposed by U.S. President Donald Trump on Canadian exports to the U.S., since August.

Canada-U.S. high-level talks in an effort to strike a favorable trade deal suffered a jolt when Trump halted the negotiations apparently angered over an anti-tariff advertisement created in Canada mocking U.S. tariffs.

Canada's Mortgage and Housing Corporation today revealed that housing starts in Canada sank by 17% from the previous year to a seasonally adjusted rate of 232,765 units in October, marking the lowest rate of starts in seven months.

In Canada, yesterday, data released by Statistics Canada revealed that the headline inflation rate in Canada fell to 2.20% in October from 2.40% in September.

The trimmed-mean core inflation rate (closely tracked by the central bank), inched down to 3.00% from 3.10% in September.

The CPI-median slipped to 2.9%.

Compared to last year, gasoline prices fell (9.4%) and grocery prices rose 3.4% annually in October, down from 4.0% increase in September.

On a monthly basis, grocery prices dropped 0.6%.

While food and energy costs softened, other parameters kept inflation sticky.

With the data showing mixed numbers, economists are undecided on the probability of another rate cut by the Bank of Canada next month.

Monitoring the developments in the U.S. and Canada, traders refrained from taking big risks.

Major sectors that lost in today's trading were Consumer Discretionary (0.81%), Industrials (0.96%), IT (1.13%), and Communication Services (1.27%).

Among the individual stocks, Telus Corp (5.28%), Celestica Inc Sv (3.50%), Docebo Inc (3.11%), and Quarterhill Inc (2.15%) were the notable losers.

Major sectors that gained in today's trading were Energy (1.87%), Healthcare (0.83%), and Materials (0.07%).

Among the individual stocks, Birchcliff Energy Ltd (5.37%), Peyto Exploration and Development Corp (5.26%), Ces Energy Solutions Corp (4.66%), and Chartwell Retirement Residences (2.91%) were the prominent gainers.

Superior Plus Corp (6.02%) and Peyto Exploration and Development (5.26%) were among the prime market-moving stocks today.