TORONTO — Canada's main stock index finished lower on Tuesday, weighed down by losses in basic materials stocks, while U.S. markets were mixed amid a broader move to defensive sectors.
Kathrin Forrest, an equity investment specialist at Capital Group, said markets were mixed on Tuesday across different regions and sectors.
“I would say overall market strength shifted toward more defensive sectors, including real estate, utilities, staples and health care. Real estate and utilities saw some tailwind from modestly lower yields across the curve, given the generally greater interest rate sensitivity in those sectors,” she said regarding the sector performance on U.S. markets.
She noted health care was another sector moving higher on U.S. markets, in contrast to information technology and communications stocks that fell.
Forrest said she saw a similar picture on Canada’s benchmark index.
“The biggest laggards in Canada were materials and information technology. A notable pullback in materials came from the gold subsector,” she said.
Forrest added that tech also retreated on Tuesday.
“Taking a step back and looking at the market today, it's a reminder to not get too caught up in chasing recent trends, but to focus on companies that are well positioned to create longer-term shareholder value,” she said.
The S&P/TSX composite index was down 98.97 points at 27,823.88.
In New York, the Dow Jones industrial average was up 10.45 points at 44,922.27. The S&P 500 index was down 37.78 points at 6,411.37, while the Nasdaq composite was down 314.82 points at 21,314.95.
In Canada, investors digested the latest inflation figures and mulled over the potential impact it may have on borrowing costs.
Economists say they found some encouraging signs in the latest inflation numbers but some warn the Bank of Canada might need a bit more convincing to cut its key interest rate next month.
Inflation fell to 1.7 per cent on an annual basis in July, according to Statistics Canada, down from 1.9 per cent the previous month.
"And while core measures continue to hover around three per cent year-over-year, which is the upper band of the bank's one to three per cent target range for inflation, it was enough to increase market expectations for a cut in policy rates by the Bank of Canada,” Forrest said.
She added that the market is pricing in about a 36 per cent chance of a cut by the Bank of Canada in September.
Meanwhile, shares of Air Canada gained slightly after it said it reached a tentative deal with the union representing its flight attendants to end a strike that began Saturday morning.
Loblaw Cos. Ltd. gained 1.84 per cent on the day after it said it completed a four-for-one stock split of its common shares.
The company had said it was doing the stock split to ensure its common shares remain accessible to retail investors and to employees who participate in its employee share ownership plan.
The Canadian dollar traded for 72.19 cents US compared with 72.42 cents US on Monday.
The October crude oil contract was down 93 cents US at US$61.77 per barrel. The December gold contract was down US$19.30 at US$3,358.70 an ounce.
This report by The Canadian Press was first published Aug. 19, 2025.
— With files from Craig Lord in Ottawa, Sammy Hudes in Toronto and The Associated Press.
Companies in this story: (TSX: GSPTSE, TSX: CADUSD, TSX: L, TSX: WN, TSX: AC)
Daniel Johnson, The Canadian Press
