FX.co ★ TSX Falls on Oil Rally and Interest Rate Hike Bets

The S&P/TSX Composite Index fell nearly 1% to around 36,000 on Thursday, as rising oil prices stoked inflation fears and strengthened expectations that interest rates will remain higher for longer. Crude prices advanced amid an escalation in the Middle East conflict, intensifying concerns about energy-driven inflation.

Markets are now pricing in additional rate hikes from both the Bank of Canada and the U.S. Federal Reserve this year, weighing on credit-sensitive sectors. Banks weakened, with BMO, Scotiabank, and CIBC each down about 1%. Miners also recorded steep losses as gold prices declined, with Agnico Eagle, Wheaton Precious Metals, and Barrick Gold all slipping roughly 4%.

Technology stocks came under pressure after U.S. megacap earnings underwhelmed, reviving worries about the durability and returns of AI-related spending. Celestica dropped more than 7% ahead of its results due Monday, while Shopify lost over 1.5% ahead of its earnings release tomorrow.

In contrast, Waste Connections jumped nearly 6% after topping profit and revenue forecasts and raising its full-year guidance.