Equities
Global markets fell as AI powerhouse Nvidia took a hit from U.S. restrictions on chip sales to China amid the intensifying global trade war.
Wall Street indexes fell at the open, with the tech-heavy Nasdaq leading declines as shares of Nvidia dropped 6.5 per cent.
The Dow Jones Industrial Average dropped 0.47 per cent to 40,179.49, the S&P 500 slid 1.13 per cent to 5,335.75, and the Nasdaq Composite tumbled 1.92 per cent to 16,499.693 at the bell.
the Toronto Stock Exchange’s S&P/TSX composite index opened 0.03 per cent higher at 24,060.24 points as investors eyed the Bank of Canada’s latest interest rate policy announcement this morning.
The central bank held interest rates steady at 2.75 per cent, pausing its easing campaign amid massive uncertainty caused by U.S. President Donald Trump’s erratic and destabilizing trade war.
In Canada, investors are getting results from Metro Inc. The retailer has reported a second-quarter profit of $220-million, up from $187.1-million a year ago, as its sales rose 5.5 per cent, but cited an “uncertain economic environment” in its outlook.
On Wall Street, markets are watching earnings from Abbott Laboratories, Alcoa Corp., CSX Corp., Kinder Morgan Inc., U.S. Bancorp and Prologis Inc.
The U.S. move ”is a clear sign that Nvidia now has massive restrictions and hurdles in selling to China,” said Daniel Ives, analyst at Wedbush Securities.
“The Street will take this news with clear nervousness worried these are the first shots fired in the tech battle between the U.S. and China and Beijing/Xi are not just going to take this news and walk away.”
Overseas, the pan-European STOXX 600 was down 0.47 per cent in morning trading. Britain’s FTSE 100 slid 0.21 per cent, Germany’s DAX dropped 0.17 per cent and France’s CAC 40 gave back 0.37 per cent.
In Asia, Japan’s Nikkei closed 1.01 per cent lower, while Hong Kong’s Hang Seng dropped 1.91 per cent.
Commodities
Oil prices rose 1 per cent, reversing early losses as the market took a bullish view on China’s stance on potential trade talks with the United States, though gains were capped by continuing fears that the trade war will curb energy demand.
Brent crude futures advanced 63 US cents to US$65.30 a barrel, while West Texas Intermediate (WTI) crude climbed 59 US cents to US$61.92.
“A de-escalation of the trade war between the U.S. and China would reduce the downside in economic growth prospects and limit the downside for oil demand growth,” said UBS analyst Giovanni Staunovo.
In other commodities, spot gold was up 2.6 per cent to US$3,310.82 an ounce, after hitting a record high of US$3,317.90 earlier in the session. U.S. gold futures gained 2.7 per cent to US$3,326.40.
Currencies and bonds
The Canadian dollar strengthened against its U.S. counterpart.
The day range on the loonie was 71.59 US cents to 72.02 US cents in early trading. The Canadian dollar was up about 3.16 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, fell 0.57 per cent to 99.65.
The euro rose 0.67 per cent to US$1.1359. The British pound gained 0.28 per cent to US$1.3268.
In bonds, the yield on the U.S. 10-year note was little changed at 4.329 per cent.
Corporate news
Parkland Corp. chief executive officer Bob Espey will retire by the end of the year as part of the fuel distributor’s attempt to defuse an activist campaign launched by its largest investor.
Economic news
China GDP, industrial production, retail sales and fixed asset investment. The Chinese economy expanded by a better-than-expected 5.4 per cent in the first three months of this year, official statistics showed Wednesday, as exporters rushed to beat stringent new U.S. tariffs which came into force in early April.
Japan core machine orders
Euro zone CPI
(8:30 a.m. ET) U.S. retail sales for March, which surged 1.4 per cent as households boosted purchases of motor vehicles ahead of tariffs, in line with forecasts, though concerns about the economic outlook are hurting discretionary spending.
(9:15 a.m. ET) U.S. industrial production and capacity utilization for March.
(9:45 a.m. ET) Bank of Canada policy announcement and Monetary Policy Report with press conference to follow.
(10 a.m. ET) U.S. NAHB Housing Market Index for April.
(10 a.m. ET) U.S. business inventories for February.
(1:30 p.m. ET) U.S. Fed Chair Jerome Powell speaks to the Economic Club of Chicago.
(6 p.m. ET) Canada’s federal leaders debate (French), which was rescheduled to start two hours earlier to not conflict with a pivotal Montreal Canadiens hockey game that could put the team in the playoffs.
With files from Reuters and The Canadian Press
