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Investing.com - Canada’s main stock index slipped on Tuesday as well, a day after the average retreated from some of its November gains.
The S&P/TSX Composite index was down 0.17% or 52 points at 31,049.2.
Index finished lower by 281 points, or 0.9%, in the prior session, backing away from a fresh all-time peak notched on Friday.
Shares in Shopify sank in particular following the e-commerce platform’s announcements that users had faced issues logging in during the crucial Cyber Monday sales event.
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Financial stocks also slipped, with analysts taking some caution ahead of a series of fourth-quarter results from big Canadian banks this week.
Elsewhere, data showed that Canada’s manufacturing sector contracted at a faster rate in November, weighed down by uncertainty surrounding the impact of sweeping U.S. tariffs.
U.S. stocks higher
U.S. stocks edged marginally higher, as investors digested disappointing manufacturing data, rising expectations of a Federal Reserve interest rate cut and speculation over who might succeed Jerome Powell as Fed Chair.
At 09:35 ET (14:35 GMT), the Dow Jones Industrial Average was 0.4%, higher, the S&P 500 index gained 0.24%, and the NASDAQ Composite was up 0.6%.
The main averages declined on Monday, ending five-day win streaks on Monday, with sentiment clouded over by figures from the Institute for Supply Management showing that manufacturing sector activity contracted for a ninth straight month in November, suggesting ongoing pressure from sweeping tariffs.
Fed rate cut bets in focus
The latest ISM data, showing more manufacturing weakness, has further strengthened expectations of a shift in Fed policy next week, with interest-rate futures suggesting investors now assign an 86% probability to a 25-basis-point cut at the December 9–10 meeting.
The move is being driven by a combination of cooling data, easing inflation pressures, and recent remarks from senior Fed officials that hinted at the possibility of lower rates starting sooner than previously anticipated.
The prospect of new leadership at the Fed is adding another layer of uncertainty, with the White House considering several candidates to succeed Powell, whose term expires next year.
BofA Global Research said on Monday it now expects the U.S. Federal Reserve to cut interest rates by 25 basis points at its December meeting, having previously expected borrowing costs to remain unchanged. It now sees two additional quarter-point cuts in 2026, in June and July, bringing the terminal rate to 3.00%-3.25%.
"Our forecast of additional cuts next year is due to the change in leadership, not our read on the economy," analysts at BofA said in a note.
White House economic adviser Kevin Hassett has emerged as the frontrunner to be the next U.S. Federal Reserve chair, according to reports last week.
Marvell to lead limited earnings parade
On a relatively light earnings calendar, U.S. chipmaker Marvell Technology (NASDAQ:MRVL) will likely be the headliner after the close.
The semiconductor group has been a major competitor of larger rival Broadcom (NASDAQ:AVGO) as a provider of custom and networking chips. On Monday, media reports said it is in advanced discussion to acquire startup Celestial AI in a potential cash-and-stock deal worth multiple billions of dollars.
The likes of MongoDB (NASDAQ:MDB), Vestis (NYSE:VSTS) and Credo Technology (NASDAQ:CRDO) will also be in the spotlight after the companies reported results after the close Monday.
Elsewhere, stocks linked to bitcoin will remain of interest after the cryptocurrency tumbled over 7% on Monday, slipping below the $84,000 mark and triggering broad declines in stocks tied to digital-asset exposure.
Strategy Inc (NASDAQ:MSTR), the largest corporate holder of Bitcoin, fell as much 12% as the slide deepened concerns about the value of its holdings.
Coinbase dropped about 5%, while Robinhood slipped more than 4%. Bitcoin mining companies, including Marathon Digital (NASDAQ:MARA) and Riot Platforms, also declined between 7% and 9% as lower prices compressed mining margins.
Crude drops
Oil prices wavered, as Ukraine peace hopes remained fragile, tensions mounted between the U.S. and Venezuela and a group of major producers backed plans to lift output levels.
Brent futures fell 0.4% to $62.95 per barrel, and U.S. West Texas Intermediate crude futures dipped 0.3% to $59.17 a barrel.
Both benchmarks advanced more than 1% on Monday, with the WTI contract near a two-week high.
U.S. envoy Steve Witkoff is due to have talks with Russian authorities Tuesday, but an immediate end to the approaching four-year long conflict between Russia and Ukraine appears unlikely.
Tensions between Washington and Caracas have also become heightened after U.S. officials signalled they may tighten restrictions on Venezuela, which is seen as having the largest oil reserves in the world, including closing their airspace.
On Sunday, the Organization of Petroleum Exporting Countries and allies, known as OPEC+, reaffirmed a small oil output increase for December but also a pause in increases in the first quarter of next year due to rising fears of a supply glut.
Gold slips
Gold prices ticked lower as the uptick in U.S. Treasury yields weighed on the metal, with investors turning cautious ahead of a series of key economic indicators and the Fed’s highly anticipated policy decision.
Spot gold slipped 0.8% to $4,197.54 per ounce as of 06:44 ET after touching a six-week high in the previous session. U.S. gold futures traded 1.1% lower at $4,228.70.
The pullback came as benchmark 10-year U.S. Treasury yields hovered near a two-week high, eroding demand for non-yielding bullion and tempering optimism around growing expectations of a near-term Fed rate cut.
Despite the softer tone, the underlying sentiment toward gold remained broadly constructive. Market pricing continues to reflect firm expectations that the Fed could deliver another interest-rate cut next week, with investors betting that softening inflation and signs of cooling labour conditions will give policymakers room to ease.