Canada's main stock index fell more than one per cent Tuesday with losses in energy, metals and financials leading the way down, while U.S. markets fell further.
The S&P/TSX composite index was down 239.26 points at 20,275.54.
In New York, the Dow Jones industrial average was down 574.98 points, or 1.72 per cent, at 32,856.46.The S&P 500 index was down 62.05 points, or 1.53 per cent, at 3,986.37, while the Nasdaq composite was down 145.41 points, or 1.25 per cent, at 11,530.33.
The market reacted strongly to comments by Federal Reserve chairman Jerome Powell made in Washington as part of a two-day testimony by the central bank leader, said Kevin Headland, chief investment strategist at Manulife Investment Management.
Powell indicated the central bank could increase the size of its rate hikes and take rates higher than previously indicated if the data continues to show a strong economy.
With less optimism than investors perhaps hoped for, equity markets took a dive alongside commodities, in a day that was a far cry from January's rally.
"It's interesting how once again the market had expected, I think, the Federal Reserve to not maintain the same tone they have been since last year, and they've been wrong each time," Headland said.
"They continue to say they're fighting inflation."
The markets were already pricing in two more interest rate hikes by the Fed but are now starting to price in larger hikes, said Headland, with March's decision increasingly expected to be 50 basis points while a third hike may also be on the horizon.
This sentiment will only be further cemented if Friday's non-farm payroll data continues to show an exceptionally strong labour market, he said.
On Friday Canada will also get fresh labour market data, but its latest rate decision will already have passed. Wednesday's announcement by the Bank of Canada is widely expected to bring no change in the bank's overnight rate.
Canada's central bank needs to walk a finer line than the Fed, said Headland, as our economy and consumer are both more sensitive to interest rates.
The Canadian dollar traded for 72.90 cents UScompared with 73.45 cents US on Monday.
The Canadian dollar's weakness Tuesday was due to U.S. dollar strength and sagging oil prices, said Headland.
With the Federal Reserve's much more hawkish positioning than the Bank of Canada, "the divergence between our two-year yields have widened, and that's the downside pressure on the Canadian dollar," said Headland.
The April crude contract was down US$2.88 at US$77.58 per barrel and the April natural gas contract was up 12 cents at US$2.69 per mmBTU.
The April gold contract was down US$34.60 at US$1,820.0 an ounce and the May copper contract was down 11 cents at US$3.98 a pound.
This report by The Canadian Press was first published March 7, 2023.
The people of F ort Chipewyan believe the federal government believe the federal government knew its water was contaminated and hid the issue for years. Now the chief of the Athabasca Chipewyan First Nation is leading the call for immediate action.
The death toll from Hurricane Helene inched up to 227 on Saturday as the grim task of recovering bodies continued more than a week after the monster storm ravaged the Southeast and killed people in six states.
A driver suffered only minor injuries after going airborne in a residential neighbourhood in Maple Ridge, B.C., on Friday, the car eventually landing on its roof in someone’s backyard.
Donald Trump returned on Saturday to the Pennsylvania fairgrounds where he was nearly assassinated in July, holding a sprawling rally with thousands of supporters in a critical swing state Trump hopes to return to his column in November's election.
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Police released the identities of the mother and daughter who were killed after a fire tore through a 160-year-old building in Old Montreal on Friday.
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Powerful new explosions rocked Beirut's southern suburbs late Saturday as Israel expanded its bombardment in Lebanon, striking a Palestinian refugee camp deep in the north for the first time as it targeted both Hezbollah and Hamas fighters.
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A French judge in the trial of dozens of men accused of raping an unconscious woman whose now former husband had repeatedly drugged her so that he and others could assault her decided on Friday to allow the public to see some of the video recordings of the alleged rapes.
French authorities said four migrants, including a two-year-old child, died Saturday in two separate incidents as they attempted to cross the English Channel toward Britain.
A rural Colorado county courthouse beefed up security Friday after threats were made against staff and a judge who sentenced former county clerk Tina Peters to nearly nine years behind bars for her role in a data breach scheme catalyzed by the lie that the 2020 election was stolen from former President Donald Trump.
Prime Minister Justin Trudeau repeatedly reiterated calls for a ceasefire in the Middle East on Saturday as he blamed Hamas, Hezbollah and Israel for a staggering number of civilian deaths.
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Bruzzese came down with COVID-19 in February 2023, and received her injection at the end of March. “Being able to recognize smells is something we take for granted, until you can’t.â€
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Scientists announced on Thursday a milestone in neurobiological research with the mapping of the entire brain of an adult fruit fly, a feat that may provide insight into brains across the animal kingdom, including people.
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Hollywood star Keanu Reeves made his professional auto racing debut on Saturday in an event in which 'The Matrix' star spun out at famed Indianapolis Motor Speedway.
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Legendary singer Paul Simon has said he is 'optimistic' about being able to return to performing live after losing most of his hearing in his left ear.
Dubai's Emirates airline has banned pagers and walkie-talkies from its planes, following last month's attacks on such devices carried by the Lebanese militant group Hezbollah.
TikToks of customers stuffing their faces with a US$20 endless shrimp. More than 100 restaurant closures and thousands of layoffs. A revolving door of CEOs. Chapter 11 bankruptcy.
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Vanderbilt takes down AP poll No. 1 Alabama 40-35 in historic college football victory.
Avry Wortman, 13, scored two touchdowns on Sunday during her team's win in the under 14 Greater Moncton Football Association.
Argentine star Lionel Messi was on the bench to start Inter Miami CF's game in Toronto on Saturday.
Tesla is recalling more than 27,000 Cybertrucks because the rearview camera image may not activate immediately after shifting into reverse, the fifth recall for the vehicle since it went on sale late last year.
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A group of classic car enthusiasts donated hundreds of blankets to nursing homes in Nova Scotia.
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A group of classic car enthusiasts donated hundreds of blankets to nursing homes in Nova Scotia.
Moving into the second week of October, the eastern half of Canada can expect some brisker fall air to break down from the north
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The Saskatchewan Teachers' Federation hosted a virtual election forum on education Thursday evening, giving candidates in the provincial election a chance to share their thoughts and answer questions on issues teachers find most important.
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Canadian musician Jacob Hoggard has been found not guilty of sexually assaulting a young woman in northeastern Ontario eight years ago. The former Hedley frontman had pleaded not guilty to sexual assault.
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Huron OPP say they were on the scene of a plane crash this morning, with a pilot finding themselves unable to halt before the end of a runway in Brussels.
Canadians who are eligible for a GST/HST tax credit can expect their final payment of the year on Friday.
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Ever since Taylor Swift made thousands, if not millions, of loyal fans’ wildest dreams come true by announcing a three-show run in Vancouver this December, scammers have attempted, and sometimes succeeded, to take advantage of the scramble for tickets.
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While the summer may be over, construction season in Lethbridge is not.
Lethbridge police executed dozens of warrants and laid numerous charges in another targeted enforcement project in the downtown area.
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The Ontario College of Family Physicians has presented awards to 750 doctors based on comments from patients, including eight physicians who are part of the Group Health Centre in Sault Ste. Marie.
Two teens, ages 14 and 19, have been charged with arson in connection with a July 14 fire in Cat Lake First Nation that destroyed $500,000 in construction materials.
A northeastern Ontario jury has started deliberating in Canadian musician Jacob Hoggard's sexual assault trial, we can now tell you what they weren't allowed to hear.
He may not have logged the fastest time or even gone the full distance, but residents of a Newfoundland town agree the goat who unexpectedly joined the local weekend half marathon was the event's undisputed champion.
A mother in a community where the cost of living is one of the highest in the country says grocery prices are 'inhumane' and retailers are putting profits ahead of people’s basic human right to food.
A soccer game in England on Tuesday night drove a spike in online traffic across the Atlantic to a website launched by the Newfoundland and Labrador government.
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