Canada’s main stock index moved a hair lower on Tuesday, while U.S. markets fell, led by the Nasdaq losing 1.65 per cent.
Big technology stocks dragged down U.S. markets, said Anish Chopra, managing director with Portfolio Management Corp.
One major drag on markets was Apple, which is seeing iPhone sales in China weaken.
Apple’s stock price was down 2.8 per cent on Tuesday.
“In addition to potentially highlighting the weakness in the Chinese economy, you also have competition from domestic rivals in China,” said Chopra.
“It’s just a more competitive environment for Apple.”
Other major tech stocks also declined, with Microsoft losing almost three per cent and Tesla down almost four per cent.
However, it’s also been a strong run for markets recently as they’ve hit multiple records, and so it’s not a surprise to see a day of weakness, said Chopra.
In New York, the Dow Jones industrial average was down 404.64 points at 38,585.19. The S&P 500 index was down 52.30 points at 5,078.65, while the Nasdaq composite was down 267.92 points at 15,939.59.
Canadian markets, meanwhile, were relatively flat as the TSX is significantly less weighted towards big tech, explained Chopra.
The S&P/TSX composite index closed down 5.14 points at 21,525.93.
Investors are anticipating some important economic news later this week, especially labour data and U.S. Federal Reserve chair Jerome Powell testifying before Congress.
The testimony could give investors more insight into the Fed’s thinking around interest rates, said Chopra, while the economic data could also provide more guidance.
Resilient economic strength has led investors to pare back their expectations for interest rate cuts. The Bank of Canada is set to announce its latest rate decision Wednesday, and is widely expected to hold steady; later this month, the Fed is expected to do the same.
U.S. economic reports released Tuesday showed growth for construction, healthcare and other services industries slowed last month more than expected, while prices paid by services businesses rose at a slower pace than the month before.
“It’s additional data for investors to make an assessment of where the U.S. economy is heading,” said Chopra.
“The U.S. economy is still growing, based on those reports. Very modestly, but it’s still growing.”
Bitcoin also hit a new record on Tuesday before pulling back somewhat. The digital currency has been gaining popularity in part because of new bitcoin ETFs in the U.S.
The Canadian dollar traded for 73.63 cents US compared with 73.68 cents US on Monday.
The April crude contract was down 59 cents at US$78.15 per barrel and the April natural gas contract was up four cents at US$1.96 per mmBTU.
The April gold contract was up US$15.60 at US$2,141.90 an ounce and the May copper contract was down a penny at US$3.85 a pound.
— With files from The Associated Press
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