TSX lower after index closes at new all-time high

Investing.com - Canada’s main stock exchange was lower on Tuesday, a day after the index ended at a new all-time high. 

The S&P/TSX composite index shed 180 or 0.6% at 30,351.72. 


Index rose by 0.2% to 30,531.88 on Monday, notching a fresh all-time closing high and extending another torrid winning streak for the average to a seventh straight session. Underpinning the index’s jump has been bullish momentum on Wall Street as well as in gold, which has spiked to record heights. 

U.S. stocks down

U.S. stocks ended lower on Tuesday, with traders assessing concerns over the ongoing U.S. government shutdown, which has partly overshadowed still-soaring enthusiasm around artificial intelligence.

The benchmark S&P 500 had shed 25 points, or 0.38%, the tech-heavy Nasdaq Composite lost by 153 points, or 0.67%, and the blue-chip Dow Jones Industrial Average lost 92 points, or 0.2%.

The benchmark S&P 500 and tech-heavy Nasdaq Composite both logged fresh record closing highs in the prior session, thanks in large part to the announcement of a deal between semiconductor group Advanced Micro Devices and OpenAI. The agreement, which will see AMD supply AI chips to OpenAI in exchange for a 10% stake in the ChatGPT-maker and is anticipated to draw in tens of billions of dollars in yearly revenue, drove shares in AMD higher by 23.7% and the wider Philadelphia Semiconductor Index up by 2.9%.

"We don’t think the AI boom in equities has run its course, despite how far it has already come," analysts at Capital Economics wrote in a note.

However, analysts at Citi flagged that the enthusiasm could reach a limit, adding that the risk of profit-taking has "rapidly risen across markets."

The broader economic backdrop remained murky. The now almost week-long federal government shuttering has particularly caused a delay to the release of key economic data, potentially making it more difficult for both financial markets and Federal Reserve policymakers to gauge the path ahead for U.S. interest rates. Instead, investors and Fed officials have had to seek out alternative data, often from private sources.

Some Fed-linked figures will still be published despite the shutdown, including a survey of consumer expectations for the New York Fed later today. A collection of central bank members are due to speak as well, although without data to comment on, analysts are unsure how much their statements may shift the narrative around rates.

U.S. President Donald Trump has said he would be open to negotiating with Democrats over healthcare subsidies, possibly opening a path for a detente in the impasse in Washington.

Tesla seen unveiling more affordable Model Y - report

Tesla is anticipated to reveal a more affordable version of its popular Model Y sport-utility vehicle on Tuesday, according to media reports.

Over the weekend, the electric carmaker fueled excitement among its fans, posting two videos on X that appeared to tease an announcement on October 7. Yet it remains unclear if there will be an in-person event, or if Tesla will make some other type of statement.

CEO Elon Musk has previously scrapped plans to come out with a less pricey $25,000 EV, Reuters has reported. But the news agency said, based on current manufacturing and design platforms, the possible car this week will be a more "affordable" offering.

Meanwhile, Ford’s stock price dipped prior to the opening bell after the Wall Street Journal reported that a fire at a key supplier will likely disrupt business at the carmaker and other auto firms for months.

Shares of Constellation Brands rose in premarket trading after the alcoholic beverage maker posted a fall in second-quarter sales that was not as deep as feared.

Demand for beer was solid, despite worries that Trump’s crackdown on immigration will impact Constellation’s key Hispanic consumers.

Gold’s new record high

Gold prices were steady at $3,959.34 per troy ounce by 06:43 ET, after having logged a new all-time high near $4,000 an ounce.

Safe-haven demand was powered by the political impasse in the U.S. and bets of a Fed rate cut later this month. Markets mostly expect the Fed to cut borrowing costs by a quarter of a percentage point at its upcoming gathering on October 28-29, CME’s FedWatch Tool showed. The central bank previously restarted an easing cycle in September and indicated that more drawdowns could be coming before the end of the year.

This has helped burnish non-yielding bullion, which tends to perform better in the low-rate environments.

Data showing increased gold buying by the People’s Bank of China also supported prices of the yellow metal. Analysts at ING said "political shakeups in France and Japan are fueling fiscal concerns" have bolstered gold as well, along with "a surge in demand from both retail investors and institutional inflows in Europe and Japan."

Oil moves slightly lower

Elsewhere, oil prices were wavering around the flatline as traders weighed a smaller-than-anticipated November output hike from the OPEC+ producer group against expectations for a supply glut.

As of 06:47 ET, Brent Oil Futures expiring in September had slipped 0.1% to $65.40 per barrel, while West Texas Intermediate (WTI) crude futures also edged down 0.1% to $61.61 per barrel.

Both benchmarks jumped over 1% on Monday, rebounding after a sharp weekly loss, after the Organization of the Petroleum Exporting Countries and its allies agreed to raise production modestly, temporarily easing some fears of a sudden oversupply of crude.

"The group remains cautious about increasing its production share in the global oil market on predictions of an upcoming supply surplus in the fourth quarter as well as next year," ING analysts said in a note.