22.10.202620:24:35UTC+00TSX Drops on Oil Rally and BoC Hike Bets

The S&P/TSX Composite Index fell 1% to close at 35,973 on Thursday, as rising oil prices stoked inflation worries and strengthened expectations that interest rates will remain higher for longer. Crude prices advanced amid escalating tensions in the Middle East.

Markets are now pricing in additional rate hikes from both the Bank of Canada and the US Federal Reserve this year, pressuring credit-sensitive sectors as investors weigh the impact of energy-driven inflation and higher borrowing costs.

Financials were weaker, with major banks declining; Scotiabank slipped 0.9%. Miners also posted steep losses as gold prices retreated: Agnico Eagle fell 6.2%, Wheaton Precious Metals dropped 6.8%, Barrick lost 5.5%, and Franco-Nevada declined 5%.

Technology stocks came under pressure after a lackluster earnings season from US megacaps rekindled concerns about the sustainability of AI-related spending. Celestica slumped 12% ahead of its results due Monday, while Shopify lost 3.5%.

In contrast, Waste Connections jumped nearly 9.5% after reporting better-than-expected profit and revenue and raising its full-year outlook.